When the production possibilities curve is a straight line, opportunity costs are the same no matter how far you move along the curve.
<h3>What is production possibilities curve?</h3>
The production possibilities curve (PPC) is a graph that shows the different combinations of output that can be produced with given available resources and technology.
The PPC curve usually have a concave shape not a straight line because there is always a cost involved in making a choice.
For example:- when the quantity of one good produced is higher and the quantity of the other is low, it is known as the opportunity cost.
Learn more about the PPC here:-
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Answer:
Total sum due after 5 years = $2,626.9
Explanation:
The sum of 100 that is invested per period(quarterly)for certain number of period is referred is referred to as an annuity. The total sum that the investment would worth after if interest rate is compounded quarterly for the investment period is referred to as the future value of annuity.
The total sum due can be computed in two stages. The first is to determined how much the annuity investment would worth after 5 years. And the second is to determine how much the single sum of $100 would worth after 5 years.
This done as follows:
The future Value of annuity is computed using the formula below:
FV = A×( (1+r)^n - 1)/r)× (1+r)
A- periodic cash flow invested
r- interest rate per period
n- number of period
FV = future value
r= 8/4= 2%
n= 5×4= 20
FV= 100×(1.02^20 -1)/0.02)×(1.02)= 2478.3
Step 2 : The future value of the value of the Initial lump sum of $100 already existing
FV= A× (1+r)∧n
= 100×(1.02)^20 =148.59
The sum due after the end of the investment period =
2478.3 + 148.59=$2,626.9
Total sum due after 5 years = $2,626.9
Answer:
The capital stock decreases
Explanation:
Options “ The capital stock decreases” is the correct answer because the decrease in capital stock will reduce production for example, if the number of plants or factories of a company decreases then its production capacity will also decrease. Therefore, the supply curve will shift left leftwards. Moreover, immigration increases the number of laborers, and advancement in technology increases the efficiency of production. Therefore, in such cases, the supply curve shifts rightwards.
Answer:
$1,101.58
Explanation:
Tenor: 30 times (15-year maturity * 2 for semiannual)
Coupon rate: 7.25% semiannual -> coupon received semiannual (PMT) = $1,000 * 7.25%/2 = $36.25
Face value (FV): $1,000
Yield To Date (YTD): 6.20% semiannual -> YTD per semiannual = 3.1% (=6.20%/2)
Bond’s price = present value of bond + present value of total coupon received semiannual
Present value of bond = FV/(1+ YTD) ^tenor = 1000/(1+3.1%)^30 = $400.1659
present value of total coupon received semiannual = 36.25/(1+3.1%)^30 + 36.25/(1+3.1%)^29+ ….. + 36.25/(1+3.1%)^1 = $701.4189
(we can use excel to calculate the PV of coupon received = PV(rate,tenor,-PMT) = PV(3.1%,30,-36.25) = 701.42)
⇒ Bond’s price = $400.1659+ $701.4189= $1,101.58
