Answer:
(D) marginal product to increase by 2 units and average product to decrease by 2 units.
Explanation:
When there will be an addition in number of workers then the marginal product that is additional units for each additional worker will increase.
But, at the same time as for calculating the average the units will decrease with the same proportion.
This is because with extra number of workers the denominator for average product will also increase and ultimately.
In the curve the marginal and average product are same level for equilibrium.
Thus, option D is correct.
Answer:
Bundles A B C D
Concert Tickets 80 60 20 0
Books 0 50 150 200
Explanation:
Since each concert ticket costs $25,
- if Sam spends $2,000 on concert tickets, he will purchase 80 tickets
- if he spends $1,500 on concert tickets, he will purchase 60 tickets
- if he spends $500 on concert tickets, he will purchase 20 tickets
Since each concert ticket costs $10,
- if Sam spends $2,000 on books, he will purchase 200 books
- if he spends $1,500 on books, he will purchase 150 books
- if he spends $500 on books, he will purchase 50 books
Answer:
The disagreement between these economists is most likely due to:
Teresa believes that the government should try to improve the well being of the citizens, while Sam believes that people should only take care of themselves and that government interventions only oppress each individual's rights and liberties.
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
-
C) Rent ceilings reduce the quantity and quality of available housing.
Sam dislikes any government intervention, so he probably dislikes rent ceilings also, and Teresa probably doesn't agree with rent ceilings because they do reduce the quantity and quality of available housing which ends up hurting the population.
Answer:
First we need to compute levered cost of equity
Ro = 15.40%
D/E ratio = 0.40/(1-0.40) = 0.6667
Rd=7.2%
We have following formula for levered cost of equity using MM model proposition II:
Without taxes
Re = Ro + (Ro – Rd) x (1-t) x D/E
= 0.1380 + (0.1380-0.0720)x (1-0.0)x0.6667
= 0.1380 + 0.0440
= 18.20%
Therefore, new cost of equity would be 18.20%.
With taxes
Re = Ro + (Ro – Rd) x (1-t) x D/E
= 0.1380 + (0.1380-0.0720)x (1-0.34)x0.6667
= 0.1380 + 0.0290
= 16.70%
Therefore, new cost of equity would be 16.70%.
