Answer: excess demand, underestimate
Explanation:
P= 1200 - 2Q
300= 1200 - 2Q
2Q = 1200 -300
2Q = 900
Q = 900/2
Q = 450
Quantity demanded is 450 units
Quantity supplied Q - P = 300
Excess demand = 450 - 300 = 150
The policy will lead to excess demand of 150 per month.
P= 1200 - 2Q
P= 1200 - 2(300)
= 1200 - 600
= 600
Willing to pay price is $600.
Deadweight loss = 0.5 × (Price buyers are willing to pay - ceiling price) × (market quantity supplied - ceiling quantity supplied)
= 0.5(600-300)(400-300)
= 0.5(300)(100)
= 15000
Deadweight loss is $15000
The welfare loss underestimate the actual loss
Answer:
a)
Project Y and Project Z
b)
Project X and Project Y
c)
Project X and Project Z
Explanation:
Apply the CAPM to calculate the required return for each project as followed:
Project W: 4% + 0.75 * (11%-4%) = 9.25%
Project X: 4% + 0.90 * (11%-4%) = 10.3%
Project Y: 4% + 1.15 * (11%-4%) = 12.05%
Project Z: 4% + 1.45 * (11%-4%) = 14.15%
So, for:
a)
Which projects have a higher expected return than the firms 11 percent cost of capital: Project Y 12.8% and Project Z 13.9% which are given.
b)
Project should be accepted is project that has expected returns higher than required return which is Project X and Project Y.
c)
Using the firm's overall cost of capital as a hurdle rate:
Project Z will be accepted which is incorrect because its Required returned is higher than its expected returns ( 14.15% > 13.9%)
Project X will be rejected which is incorrect because its Required returned is lower than its expected returns ( 10.3% < 10.8%).
Answer:
Date Account, title and description debit credit
June 3 Merchandise inventory 3,985
Accounts payable 3,985
Merchandise purchased on account
from JVC Co.
June 9 Merchandise inventory 2,300
Accounts payable 2,300
Merchandise purchased on account
from Prime Target, terms 2/10, n/30
June 12 Store supplies 675
Accounts payable 675
Merchandise purchased on account
from Craft Shop
June 13 Accounts payable 3,985
Cash 3,985
Paid for June 3 purchase of
merchandise from JVC Co.
June 19 Accounts payable 2,300
Cash 2,254
Purchase discounts 46
Paid for June 9 purchase of
merchandise from Prime Target and
obtained a 2% discount
Answer: A. Widget workers agree a large wage decrease so that none of them will have to be laid off.
Explanation:
There are activities that affects supply function cost, like wages cost going down, pushing prices down as well. In this case, with everything else constant, when cost go down the productivity per factor increase, making it possible to produce the same quantity at a lower price, or to produce more at a same price
