Answer:
Options C and E
Only Nick and Jake are optimising over his choice of fruit?
Explanation:
The marginal utility obtained from the purchase of a product is the amount of satisfaction derived from purchasing an additional unit of the product.
The utility is maximised when the satisfaction in terms of marginal utilities obtained from each product is equal to each other.
We obtain this simply by dividing the marginal utilities for each fruit by their price, and comparing them.
Dmitiri:
Apples: 8/1 =8
Pears: 10/2 =5
8/1 is not equals to 10/2
Frances:
Apples: 7/1 =7
Pears: 16/2 =8
7 is not equals to 8
Jake:
Apples: 6/1 =6
Pears: 12/2 =6
The marginal utility is equal hence Jake's choice is optimal
Latasha:
Apples: 5/1 =9
Pears: 9/2 =4.5
9 is not equals to 4.5
Nick:
Apples: 4/1 =4
Pears: 8/2 =4
The marginal utility is equal hence Nick's choice is optimal
Answer:
1. Real risk-free rate.
2. Nominal risk free-rate.
3. Inflation premium.
4. Liquidity risk premium.
5. Liquidity risk premium.
6. Maturity risk premium.
Explanation:
Market interest rates can be defined as the amount of interests (money) paid by an individual on deposits and other financial securities or investments. The factors that typically affect the market interest rate known as the determinant of market interest rates are;
1. This is the rate on short-term U.S. Treasury securities, assuming there is no inflation: Real risk-free rate r*
2. It is calculated by adding the inflation premium to r*: Nominal risk free rate.
3. This is the premium added to the real risk-free rate to compensate for a decrease in purchasing power over time: Inflation premium.
4. This is the premium added as a compensation for the risk that an investor will not get paid in full: Liquidity risk premium.
5. This premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value: Liquidity risk premium.
6. This is the premium that reflects the risk associated with changes in interest rates for a long-term security: Maturity risk premium.
The correct answer would be index mutual fund
Answer:
$50
Explanation:
Net income will be the difference between the selling price and the Cost price.
Cost price is $1000
net profit margin is 5%, selling price will be
=$1000 + profit margin
= $1000 + (5/100 x 1000)
=$1000 + $50
=$1050
Net income = $1050 -$50
=$50
Answer:
Signal Company
Signal should rework the phones with its excess capacity. Reworking reduces its loss by $10,000 (or $10 per phone).
Explanation:
a) Data and Calculations:
Number of defective cell phones produced = 1,000
Cost of production per phone = $60
Salvage value per phone = $30
Additional rework cost per phone = $80
Selling price after reworking per phone = $120
Differential Analysis:
Scrap Rework Difference
Sales revenue $30,000 $120,000 $90,000
Cost of production 60,000 140,000 80,000
Loss $30,000 $20,000 $10,000
Per unit calculations:
Scrap Rework Difference
Sales revenue $30 $120 $90
Cost of production 60 140 80
Loss $30 $20 $10
