Answer:
C) shift the supply curve up by exactly $4 and the price paid by buyers will rise by less than $4.
Explanation:
A new tax will reduce the money received by the suppliers, which will result in a leftward shift of the supply curve. This means that the price of DVDs will increase at every level of quantity demanded. This will also decrease the total demand for DVDs since their price will increase.
Even though the tax is levied on the suppliers, both the suppliers and the consumers will suffer from it.
Answer:
This statement is False.
Explanation:
<u>Evidence-based Human Resources</u> is the practice of evaluating decisions based on real data, experience, research and/or expert opinions in order to obtain the best outcome from such decision. It consists of gathering all reliable and related sources of information regarding a specific situation to analyze it and make an informed decision. Of course, this does not mean that there will not be any mistakes, but <u>Evidence-based HR</u> helps in getting rid of biases and assumptions that affect decision-making.
Answer:
B. Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and its market price.
Explanation:
As we know that the consumer surplus shows a difference between the maximum price willing to pay for a good or for rendering the service and the market price
In mathematically,
The consumer surplus = Willing to pay - Market price
Therefore, the correct statement is option B as the rest of the statements are wrong.
Revenue that is foregone (or given up) as a result of doing another activity is known as an opportunity cost
This is further explained below.
<h3>What does the opportunity cost?</h3>
Generally, In the context of microeconomic theory, the opportunity cost of a certain action refers to the value or gain that is lost as a result of participating in that activity as opposed to participating in an alternative activity.
To put it another way, it indicates that if you choose one activity over another, you will not be able to participate in the other choice.
In conclusion, An opportunity cost is the amount of potential income that is lost as a direct consequence of a decision to engage in another activity instead.
Read more about opportunity cost
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Answer:
Find my detailed explanations and answers below
Explanation:
1.
Based on the dividend discount model, the share price is the present value of the expected dividend as shown by the formula below:
share price=expected dividend/(cost of equity-growth rate)
share price=$25.25
expected dividend=$1.62
cost of equity=unknown(let us assume it is K)
growth rate=8%
$25.25=$1.62/K-8%
$25.25*(K-8%)=$1.62
K-8%=($1.62/$25.25)
K=($1.62/$25.25)+8%
K=14.42%
2.
Using the Capital Asset Pricing Model, the formula for cost of equity is as shown thus:
cost of equity=risk-free rate+beta*(market return-risk-free rate)
risk-free rate=3%
beta=0.80
,market return=14%
cost of equity=3%+0.80*(14%-3%)
cost of equity=11.80%
3.
cost of equity=cost of debt+risk premium
cost of debt=12%
risk premium=market return-risk-free rate=14%-3%=11%
cost of equity=12%+11%=23%
If all of the figures are of equal confidence, our cost of equity should be the average of the three
cost of equity=(14.42%+11.80%+23%)/3=16.41%
