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Feliz [49]
3 years ago
7

Fred is thinking of starting a bowling alley near a college campus. Fred is an expected utility maximizer with utility function:

U(W) = 1 – (3000/W), where W is his wealth. Fred’s total wealth is $12,000. With probability 0.2 the alley will be a failure and he’ll lose $9,000, so that his wealth will be just $3,000. With probability 0.8 it will succeed and his wealth will grow to $X. What is the smallest value of X that would be sufficient to make Fred want to invest in the bowling alley rather than have a wealth of $12,000 with certainty?
Business
1 answer:
vlada-n [284]3 years ago
5 0

Answer:

$14,250

Explanation:

To determine what amount of money will make Fred take his chances and invest in this new business, we first have to solve this equation:

  • current wealth - (% chance of losing money x wealth after losing money)

$12,000 - (20% x $3,000) = $12,000 - $600 = $11,400

Then:

$11,400 / 80% of getting wealthier = $14,250

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An airline company is interested in the opinions of their frequent flyer customers about their proposed new routes.​ Specificall
prohojiy [21]

Answer: Stratified Sampling

Explanation: Stratified sampling is a type of sampling method where the population is divided into groups called strata.

Participants will now be selected from each group at random to participate in the survey.

4 0
3 years ago
On August 1, 2018, Kira purchased 100 shares of ITC stock for $5,000. There were no subsequent adjustments to her basis. On Augu
padilas [110]

Answer:

b. Short-term loss of $700 and a long-term gain of $900.

Explanation:

August 1, 2018, price per share $50

August 1, 2019, sold 50 shares at $36, resulting in a short term capital loss of ($700)

August 31, 2019, sold 50 shares at $68, resulting in a long term capital gain of $900

If you own a stock for 1 year or less, any gain/loss will be considered short term. If you own a stock for more than 1 year, any gain/loss will be considered long term.

8 0
3 years ago
Why do monopolies engage in price discrimination when possible? Enumerate and explain the nature of possible impediments to pric
TEA [102]
Monopolies engage in price discrimination possible because they can get away with it.

A monopoly is where only one seller sells a particular good. Because of this, the seller has the power to dictate the price of the good to the extend of giving the good the highest price possible that a consumer is willing to pay. 

Consumers must pay the price of said product because they can not get the same product from any other seller.
6 0
3 years ago
If the required reserve ratio is 10%, actual reserves are $10 million, and currency in circulation is equal to $20 million, M1 w
Pie

Answer:

The correct answer is E

Explanation:

M1, M2 and M3 are the terms which measure the money supply of United States, referred to as money aggregates.

The formula for computing the M1 is as:

M1 = coins as well as currency in circulation + checkable or demand deposit + traveler checks

where

Currency in circulation is $20 million

Demand deposit is as:

= Required reserve × Actual reserve

= 10 ×  $10 million

= $100 million

Putting the values above:

M1 = $20 million + $100 million

M1 = $120 million

8 0
3 years ago
In 2019, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The
Lady_Fox [76]

Answer:

FUTA tax due from the corporation is $108

 

Explanation:

The First and Second employee earned 7000 each

The Third employee earn earns 4000

Paid under State Unemployment Tax by the employer is = (7000+7000+4000) x 5.40% =$972

How much FUTA tax is due from Willow Corporation for 2019?

Credit of tax paid in State Unemployment Tax is availabe for FUTA tax of 6%, thus FUTA due will be:

=(6% of 18000) - $972

=1080-972

=$108

5 0
3 years ago
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