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Vaselesa [24]
3 years ago
14

Juan works at Texas Burgers in El Paso and earns $8.00 per hour. His twin brother Felipe works in Mexico Burgers in Ciudad Juare

z just across the border and earns $3.00 per hour for exactly the same work. An economist looking at this situation sees:
A.an incentive for Felipe to cross the border to get a job and thus reduce the gap.
B. an incentive for Felipe to quit and find another job in Mexico.
C. the tendency of the rich to get richer and the poor to get poorer, widening the gap.
D. evidence that the law of one price has no support in the real world.
Business
1 answer:
Vesna [10]3 years ago
3 0

Answer:

A.an incentive for Felipe to cross the border to get a job and thus reduce the gap.

Explanation:

Economists are concerned with the efficient use of resources to achieve maximum benefits. Economics is about making choices that add the greatest value to society. An economist will consider the opportunity cost associated with an option before making a decision.

The wage rate in Texas, where Juan works is much higher compared to what Felipe earns. Felipe can gain more by offering his labor service in Texas, which is just across the border. Economists will consider the earnings per hour, and judge than Felipe will be better off working in Texas compared to Mexico.

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Trish receives $450 on the first of each month. Josh receives $450 on the last day of each month. Both Trish and Josh will recei
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Answer:

The last option is the answer -$141.80

Explanation:

we will use the present value formula for Trish she gets paid every first day of the month therefore she will receive an immediate payment of cash flow which will be added to the present value of future periodic value. Therefore we will find the difference between present values for Trish and Josh which have the same amounts which they'll receive per month.

Given: Trish and josh both receive $450 per month therefore that will be C the monthly future payment that will be received.

They will receive these amounts in a course period of Four years so that will be n = 4 x12=48  because we know that they will receive these payments every month or on a monthly basis for four years. which n represent periodic payments.

i which is the discount rate of 9.5%/12 as we know they will recieve these amounts monthly.

Therefore using the following formulas for present value annuity:

Pv = C[(1-(1+i)^-n)/i] and Pv= C[(1-(1+i)^-n)/i](1+i) then get the difference between these two present values for Trish and Josh.

therefore we will substitute the above values on the above mentioned formula to get the difference:

Pv= 450[(1-(1+9.5%/12)^-48)/(9.5%/12)]  - 450[(1-(1+9.5%/12)^-48)/(9.5%/12)](1+9.5%/12)    then we compute and get

Pv= $17911.77614 - $18053.5777

Pv = -$141.80 is the difference between the two sets of present values as one has an immediate payment and one doesn't have it.

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