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valentinak56 [21]
3 years ago
12

Does the market system result in allocative​ efficiency? in the long​ run, perfect competition

Business
1 answer:
Inga [223]3 years ago
7 0
C.

Allocative efficiency in simple terms basically means there is no wastage, therefore if producers produce at price equals marginal coat, they are producing at the point where consumers are willing to pay that final price. Refer to the poorly drawn diagram for reference.

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Suppose Barry is maximizing his utility from consuming used paperback novels and audio books. The price of a used novel​ = $4 an
melamori03 [73]

Answer:

None of the answers is correct, it should be 64 utils

Explanation:

If Barry's utility from consuming a used novel is 32 utils and the book costs $4, he was able to get 8 utils per dollar (= 32 / $4).

If an audio book costs $8, then Barry should obtain $8 x 8 utils per dollar = 64 utils.

7 0
3 years ago
Katie wants to order a new shirt online. What should she do once she gets to the store's website?
Mariulka [41]
The answer is D. Find the shirt and add it to the electronic shopping cart.
7 0
3 years ago
Why is there so much government regulation involving social responsibility issues? Should there be less?
Lesechka [4]
I think genuine corporate social responsibility is very important, as long as it is not just lip service. When a company for example harvests a resource like trees or minerals then it is benefiting from the natural riches so should definitely be putting something back into the community and the natural environment not just say "log it mine it pave it" and ignore any adverse consequences.
7 0
3 years ago
Quiz during the class. Calculate the WACC which represents the "hurdle rate" for a typical project with average risk using midpo
aleksklad [387]

Answer:

a.Year   Cashflow    [email protected]%      PV           [email protected]%     PV

               $                                 $                                  $

  0        (1,000)           1           (1,000)           1          (1,000)

1-15          72             11.1184    800          7.6061        548

15         1,000          0.5553    555.3      0.2394        239

                                  NPV      355.3              NPV    213                    

Kd = LR     + NPV1/NPV1 + NPV2    x (HR – LR)

Kd = 4       + 355.3/355.3 + 218   x (10 – 4)

Kd = 4       + 355.3/573.3 x 6

Kd = 7.72%    

b. Kp = D/Po

   Kp = $100/$1,111

  Kp = 0.09 = 9%

c. Ke = D1/Po (1 – FC)  + g

  Ke = $4.3995/$50(1-0.15) + 0.05

  Ke = $4.3995/$42.50 + 0.05

 Ke = 0.1535 = 15.35%

WACC = Wdrd(1 – T)  + Wprp + Were

WACC = 0.3(7.72)(1-0.4) + 0.1(9) + 0.6(15.35)

WACC = 1.39 + 0.9 + 9.15

WACC = 11.44%                    

Explanation:

In this case, we need to calculate cost of debt, cost of preference shares and cost of equity. Cost of debt is calculated based on internal rate of return. Cost of preferred stock is the ratio of dividend paid to the market price. Cost of equity is a function of D1 divided by current market price after floatation cost plus growth rate. WACC is equal to cost of each source multiplied by respective weights.

3 0
3 years ago
The duty of a broker-dealer firm and its individual brokers to ensure that investment recommendations made to customers are suit
Alex_Xolod [135]

Answer:

The answer is option "D"

Explanation:

The suitability condition that broker-dealer firms have to adopt includes making investment recommendations on the basis of their applicability in terms of what the customer's profile is. To do this, the firm needs to have adequate and reasonable understanding of the customer, their needs, their risk profile, details of their other investments and their age among several other factors. Firms use these details and then perform their own research, or 'due diligence' to ensure that the recommendations made are appropriate in the customer's context. Options A and B pertain to this criteria and are therefore correct. Option C is also correct since, even if the investment recommendation is in line with the customer's profile, firms must still refrain from making trade recommendations that are excessive in size because they can, among other issues, raise the risk profile of the trade.

Now lets look at option D. Broker-dealers do rely on the customers providing customer specific information so that they can plan investment recommendations accordingly, however, this is not the only practice that is required. Firms need to conduct their own research and due diligence as well. Furthermore, customers may be unwilling to disclose certain information, for example, details of their other investments. In this case, firms need to be cautious and carefully analyse whether they have 'enough' customer specific information to be reasonably certain that the investment recommendation is appropriate. As long as enough information exists to form the reasonable basis, firms do not need to refrain from making recommendations.

Therefore, the correct option is D.

7 0
3 years ago
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