Answer:
1. 4%
2. 2%
Interest rates are rounded off to nearest whole number.
Explanation:
Fisher effect formula determines the relationship between the Nominal rate, Real rate and inflation rate.
Fisher effect formula is as follows
1 + nominal rate = ( 1 + real rate ) ( 1 + inflation rate )
1.
1 + 5% = ( 1 + real rate ) ( 1 + 1% )
1.05 = ( 1 + real rate ) x 1.01
1 + real rate = 1.05 / 1.01
1 + real rate = 1.0396
real interest = 1.0396 - 1 = 0.0396 = 3.96% = 4%
2.
Inflation premium = [ ( 1+ nominal rate ) / ( 1+ real rate ) ] -1
Inflation premium = [ ( 1+ 6% ) / ( 1+ 4% ) ] -1
Inflation premium = [ ( 1.06 / 1.04 ] -1
Inflation premium = 1.0192 - 1
Inflation premium = 0.0192
Inflation premium = 1.92%
Inflation premium = 2%
Answer:
B) aliceland has an absolute advantage, but not comparative advantage, in producing food.
Explanation:
Aliceland has absolute advantage in the production of food because it produces more food (32) than Georgeland that produces (16). Aliceland doesn't have a comparative advantage because both lands have the same comparative advantage in the production of food.
Comparative advantage of Aliceland in food production = 16 / 32 = 0.5
Comparative advantage of Georgeland in food production = 8 / 16 = 0.5
Aliceland has absolute advantage in the production of food and cloth but no comparative advantage in either.
Georgeland doesn't have absolute or comparative advantage in the production of food and clothes.
I hope my answer helps you
Probably drop one of the goals or find a different time to do it
Answer:
decline and product diversity in the market increases.
Explanation:
Competitive price searcher markets are those that have little barriers of entry for new firms.
Also the new forms are able to engage in transactions that are profitable. That is they easily take a market share.
In this scenario it will result in greater diversity of products as many firms can now produce goods that will be profitable in the market.
Also it will lead to a decrease in profit of existing firms as the new firm gets some of the market share
Answer:
To maximize income, Kelvin should use 5445 hours to replace 165 shocks.
Explanation:
The number of hours taken for replacing the shocks is 1.5 times higher than replacing the brakes. (1.5 = 33 hours/ 22 hours)
While the income from replacing the shocks is double/ 2 times higher than replacing the brakes (2.0 = $500500/$250250)
It’s viable that replacing the shocks is more effective in term of income compared to hours taken.
If Kevin use his maximum 5,454 hours a week for replacing the shocks, then he can replace 165 shocks and earn $82,582,500.
If the customer resource is unlimited, then it It is better to focus on replacing shocks only.