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kakasveta [241]
3 years ago
6

Sofia pays Sam $50 to mow her lawn every week. When the government levies a mowing tax of $10 on Sam, he raises his price to $60

. Sofia continues to hire him at the higher price. What is the change in producer sur- plus, change in consumer surplus, and deadweight loss? a. $0, $0, $10 h b. $0, -$10, $0 c. +$10, -$10, $10 d. +$10,-$10, $0
Business
1 answer:
Studentka2010 [4]3 years ago
7 0

Answer:

b. $0, -$10, $0

Explanation:

Sam is the producer, and he was getting $50 for moving Sofia's lawn. When the government imposes a tax of $10 on his activity, he now receives $60, but because $10 of those $60 is paid in taxes, his surplus remains the same: $50, so the change in the producer's surplus is $0.

Sofia is the consumer, and she was paying $50, but now she pays $60, thus, her consumer surplus has changed by -$10.

The sum of the change in consumer and producer surplus is $10 ($0 + $10), which is the same as the growth of government revenue from the taxes imposed: $10, therefore, the deadweight loss is $0.

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Both Projects A and B are acceptable as independent projects. However, the selection of either one of these eliminates the optio
Slav-nsk [51]

Answer: Mutually exclusive

Explanation:

In probability theory and logic, two propositions or events are disjoint or mutually exclusive if both events cannot occur at the same time. An example is the outcomes derived from the single toss of a coin which either be head or tail

In the project example given, the theory used is called mutually exclusive since both projects can not be chosen at the same time and it is only one project at w time. Mutually exclusive events are also called independent events since they have no effect on the viability of the other options.

4 0
3 years ago
Suppose that demand for a product is Q = 1200 − 4P and supply is Q = −240 + 2P. Furthermore, suppose that the marginal external
eimsori [14]

Answer: 16 units more than social optimum.

DWL = dead weight loss = (1/2)*(Q* - Q°) 12 =96

Explanation:

Q=1200 - 4P and Q=-240 + 2P

In a free market quantity demand =quantity supplied

1200 -4P = -240 +2P

P =240

Sub P

Q* = 240

Socially optimal quantity is

Marginal social benefit (MSC)= marginal social cost(MSC), including external damage =MEC

MPC= marginal private cost =inverse of supply function

MPC = (1/2)*Q + 120

MEC=12

MSC =(MPC +MEC) = (1/2)Q +120 +12

MSC= MPB where MPB is marginal private benefit = inverse of demand functn

MPB = 300 -(1/4)Q

(1/2)Q + 132 =300 - (1/4)Q

Q° = 224

Difference btw Q* & Q° = 16 units more than social optimum.

DWL = dead weight loss = (1/2)*(Q* - Q°) 12 =96

4 0
3 years ago
Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 8 percent. You also
maks197457 [2]

Answer: $3.46

Explanation:

Given the following :

Current share price (P0) = $90 per share

Required return on stock= 8%

total return on the stock is evenly divided between a capital gains yield and a dividend yield ;

Therefore, Required return on stock= 8% ;

4% capital gain yield + 4% Dividend yield = 8%

Growth rate = 4% = 4/ 100 = 0.04

D1 = D0(1 + g)

D1 = value of next year's Dividend

D0 = current Dividend yield

g = Constant growth rate

D1 = current stock price * g

D1 = 90 * 0.04 = 3.6

D1 = D0(1 + g)

D0 = D1 / (1+g)

D0 = 3.6 / (1+ 0.04)

D0 = 3.6 / 1.04

D0 = $3.46

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Answer:

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