Which of the following illustrates the law of demand? a. Jorge buys fewer pencils at $2 per pencil than at $1 per pencil, ceteri
s paribus. b. Chen buys more ice cream at $4 per half-gallon than at $3 per half gallon, ceteris paribus. c. Karissa buys fewer sweaters at $50 each than at $35 each, ceteris paribus. d. a, b, and c e. a and c
1 answer:
Answer:
e. a and c
Explanation:
The law of demand states that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded. This occurs because of the law of diminishing marginal utility.
The law of diminishing marginal utility states that the more of a commodity is consumed, the lower the utility derived from the consumption of the product.
It follows that Jorge and karissa would demand less of pencils and sweaters as their prices rise.
The demand curve is usually downward sloping to illustrate the law of demand.
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Answer:
Price of treasury bond in terms of percentage of face value is 102.106%
Explanation:
Given:
Face value (FV) = $1000
Coupon rate = 7% or 3.5% semi-annually
Coupon payment (PMT) = 1000×0.035 = $35
YTM (rate) = 6.5% or 3.25% semi-annually
Maturity period (nper) = 5×2 = 10 periods
Using PV function to calculate price of treasury bond:
=PV(rate,nper,pmt,FV)
Price of bond is $1021.06 (it is negative as it is a cash outflow)
Price of bond in terms of percentage of face value =
=102.106%
