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Nana76 [90]
3 years ago
15

Consider a two-period resource allocation problem where the efficient allocation of the resource implies a market price of $10 i

n the first period. Assume in both periods the constant marginal extraction costs equal $2 and the social discount rate is 10%. The socially efficient undiscounted market price in the second period must be:
Business
1 answer:
RideAnS [48]3 years ago
3 0

Answer:

$10.80

Explanation:

Given that:

A first-period efficient allocation cost = $10

The constant marginal extraction cost  MEC for both periods = $2

The social discount rate (r) = 10%

∴

The efficient undiscounted market price for the 2nd period can be determined by using the formula:

P_1 - MEC_1 = \dfrac{P_2 -MEC_2}{1+r} \\ \\  \implies 10 -2 = \dfrac{P_2-2}{1+0.1} \\ \\ 8 = \dfrac{P_2-2}{1.1} \\ \\ P_2 -2 = 8 \times 1.1 \\ \\ P_2-2=8.8 \\ \\ P_2 = 8.8+2 \\ \\ \mathbf{P_2 = \$10.80}

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An example of a customer would be someone buying one of your products like someone shopping at a store.

A consumer would be eating the food you have or bought

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Explanation:

8 0
2 years ago
Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. when will the check be d
maks197457 [2]

The answer is After the seller accepts the purchase offer.

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4 0
1 year ago
The average-marginal rule states: a. when the marginal magnitude is rising, the average magnitude must also be rising. b. when t
lozanna [386]

Answer:

The correct answer is letter "C": when the marginal magnitude is below the average magnitude, the average magnitude falls.

Explanation:

The average-marginal value is an Arithmetic rule implemented in Economics that states that when the marginal value is above the average value, the average value tends to rise, In case the marginal value is below the average value, the average value tends to fall. The average value remains the same when it is equal to the marginal value.

5 0
3 years ago
As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y sub
Darina [25.2K]

Answer: Substitute

Explanation:

Substitute goods are the goods that can be used for the same purpose. Complement are the goods that are used together e.g. car and petrol.

It should be noted that when the price of a good increase, people move to the substitute and this will being about the rise in the quantity demanded of the other good.

Therefore, as the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units shows that the are substitutes.

4 0
2 years ago
You are planning your retirement in 15 years. You plan to retire with $3,000,000 and your retirement account earns 4.8% compound
Maslowich

Answer:

The retirement fund will last for 33 years and 7 months

Explanation:

We need to solve for time in an ordinary annuity

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C  $15,000.00

rate 0.004 (4.8% divide by 12 month)

PV $3,000,000

time n

15,000 \times \frac{1-(1+0.004)^{-n} }{0.004} = 3,000,000\\

we clear for n as much as we can and solve

(1+0.004)^{-n}= 1-\frac{3,000,000\times0.004}{15,000}

(1+0.004)^{-n}= 0.20

now we use logarithmic properties to solve for n:

-n= \frac{log0.2}{log(1+0.004)

-403.16  

this will be a value in months so we divide by 12 to get it annually

403/12 = 33,5833

we convert the residual to months:

0.5833 x 12 = 6.996 = 7 months

6 0
3 years ago
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