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Olenka [21]
3 years ago
5

An Empirical Bargaining Model with Digit Bias – A Study on Auto Loan Monthly Payments

Business
1 answer:
dedylja [7]3 years ago
3 0

Answer:

This study was carried on by Jiang, Zhenling, during the first semester of 2019 and it involved more than 35 million auto loans in the US. The author determined that monthly payments carrying a $9 ending digit, e.g. $199, had a highest interest rate charged. While those monthly payments carrying a $0 ending digit, e.g. $200, had the lowest interest rate charged. African American and Latin consumers were the most negatively affected groups by the higher interest rates.

The study showed that an effective bargaining tactic would decrease total payments significantly. This research also includes a lot of other information regarding the total economic effects of ending digit bias.

Explanation:

I personally guess that many car sellers and auto loans institutions tempt both African American and Latin consumers by using apparently lower monthly payments (psychologically we all consider $199 to be much cheaper than $200) in order to charge higher interest rates. They also probably offer longer term loans, e.g. 5-6 year loans instead of 3-4 year loans.

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3 years ago
Label each scenario with the term that best describes it. Use the midpoint method when applicable. Marcel Duchamp was a famous a
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Answer:

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Explanation:

Price Elasticity of Supply is sellers' quantity supplied response to price change. P(Es) = % change in supply / % change in price.

Supply can be classified by Price Elasticity of Supply, as undermentioned :

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6 0
3 years ago
At the end of its first month of operations, Michael's Consulting Services reported net income of $29,200. They also had account
artcher [175]

Answer:

$34,900

Explanation:

The computation of the ending balance in the Owner's Capital account is shown below:

= Net income + investment

= $29,200 + $5,700

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The another method is

Stockholder equity = Total assets - total liabilities

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Total assets = Cash + Office supplies + accounts receivable

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And, the total liabilities is zero

Now put these values to the above formula  

So, the value would equal to

= $34,900 - $0

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3 years ago
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