Explanation: When the price of gold an input used in the production of processors increases, it leads to a rise in the cost of producing processors. As a result of this, producers will cut down their production and decrease supply. The supply curve for processors will shift upward to the left from S1 to S2 leading to a rise in the price of processors from P1 to P2 and a fall in the quantity of processors being sold in the market from Q1 to Q2.
Answer:
790,000, i.e. $79 x 10,000= 790,000
. Yes, the manufacturer should change the design. 666,667 (when it goes from 1/10,000 to 1/15,000). It is 500,000 (when it goes from 1/10,000 but 1/20,000)
. No, the benevolent social planner would not agree with the manufacturer's decision.
Explanation:
In the estimates provided by the manufacturer, the total cost of the design is equivalent to $79 x 10,000= 790,000. There should be an alteration in the design to remove the necessary precautions. If the probability is different from the estimate provided by the manufacturer, the planner will disagree with the decision made by the manufacturer. For example, a change to 1/15000 will make the total cost to be approximately $666,667.
Answer:
The economic value establish in this case is $450
Explanation:
Economic value is the term which is defined as the computation of the profits an asset has either manufactured or might produce in the future. It is that measure of the product or service benefit provide the economic agent.
For computing the economic value as:
EV (Economic value) = (Actual rate of return - Cost of Capital) × Net Investment
where
Actual rate of return is $800
Cost of capital is $350
Net Investment is nil
Putting the values above:
EV = $800 - $350
EV = $450
Complete Question:
An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is:
Group of answer choices
A) the safety of the principal invested.
B) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices.
C) the yield is always higher than mortgage yields.
D) the yield is always higher than bond yields.
Answer:
B) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices.
Explanation:
An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices.
Generally, common stocks are considered by financial experts or broker-dealers to be a suitable type of investment of variable annuities because the prices of common stocks in the market are not fixed and as such they are affected by economical changes such as inflation or recession.
