Self-interest of course! Though you gave us no clue as to who is Adam... You can tell it's mostly self-interest due to the fact that he hasn't taken any class or anything on it. Looks to me that he genuinely just loves cooking!
Answer:
The answer is b Justifies ignoring the matching principle in certain circumstances.
Explanation:
Answer:
a. Negative slopes
Explanation:
A negative slopes indicate that there exist a negative relationship between price and quantity demanded of a particular good. This means that when price falls, more units of goods will be purchased by the consumer and vice versa.
A normal good is a type of good whose demand increases as a result of increase in consumer's income. In other words, the higher the income, the higher the quantity demanded of such good by the consumer and vice versa.
It follows that when there is an increase in wage or income of a consumer , more goods will be purchased by them except if there is an increase in the price of such good . When there is price increase for such good, consumer will switch to a substitute good.
Answer:
The demand for Post Raisin Brand cereal is: ELASTIC
the demand for all types of breakfast cereals is: INELASTIC
Explanation:
To calculate the price elasticity of demand (PED) we can use the following formula:
PED = % change in quantity / % change in price
- If PED > 1, the demand is price elastic
- If PED = 1, the demand is price unitary
- If PED < 1, the demand is price inelastic
*The PED always results in a negative number, e.g. price deceases, quantity increases, but for practical reasons we convert the negative number into a positive (we use absolute values) when we are determining the elasticity.
Answer:
a) 16%
b) 2.25
c) Increase in expected market risk premium
Explanation:
Expected standard deviation of market return = 20%
measure of risk aversion ( A ) = 4
a) Determine a reasonable expected market risk premium
= A * ( std ) ^2
= 4 * ( 20%)^2
= 16%
b) determine Value of A
market risk premium = A * ( std )^2
∴ A = 9% / ( 20% ) ^2
= 0.09 / 0.04
= 2.25
c) If investors become more risk tolerant the expected market risk premium will increase
