Microeconomics I Homework#1 Answer Key Fall 2009 I. Multiple choice question 1 2 3 4 5 6 7 8 9 10 D C C A A D D B A C 11 12 13 14 15 C C A B C 1) Who or what is responsible for the allocation of scarce resources into the production of most goods in the U.S.? A) the American government B) the UN C) the Federal Reserve Bank D) markets and prices Answer: B 2) Which of the following is an example of a normative statement?
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and subsidies C. people make choices in the presence of scarcity and the results of those choices. D. interest rates and exchange rates are determined 2. The scarcity principle implies that A. people will never be satisfied with what they have B. as wealth increases‚ making choices becomes less necessary C. the prices of scarce goods must rise due to excess demand D. choices must be made and tradeoffs will occur 3. The ’no-free-lunch’ principle is another name for the
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(CM) | Radius (CM) | M&M Thickness (CM) | 1 | 75 | 11.34 | 5.67 | 0.722 | 2 | 83 | 12.68 | 6.34 | 0.658 | Table 2 - Direct Measurement | Trial | M&M Thickness (CM) | 1 | 0.642 | 2 | 0.741 | 3 | 0.683 | Table 3 - Calculated Averages | Method | Calculated Average Thickness (cm) | Indirect (from Table 1) | 0.700 | Direct (from Table 2) | 0.689 | Questions: 1. When you performed Step 2 of the procedure‚ you actually made a cylinder of M&Ms. The cylinder was
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P 3–4: Just One‚ Inc. Just One‚ Inc.‚ has two mutually exclusive investment projects‚ P and Q‚ shown below. Suppose the market interest rate is 10 percent. The ranking of projects differs‚ depending on the use of IRR or NPV measures. Which project should be selected? Why is the IRR ranking misleading? Using the IRR method will result in project Q being selected over P due to its higher rate of return. Using the NPV method would result in choosing project P because of its higher NPV.
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1. A firm’s current profits are $1‚000‚000. These profits are expected to grow indefinitely at a constant annual rate of 3.5 percent. If the firm’s opportunity cost of funds is 5.5 percent‚ determine the value of the firm: Instructions: Round your responses to 2 decimal places. a. The instant before it pays out current profits as dividends. $ million b. The instant after it pays out current profits as dividends. $ million (page 18) Explanation: a. The value of the firm
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are concerned about nowadays is making more money. We know that unemployment is increasing day by day‚ and for that reason‚ many people try to work laboriously. Moreover‚ they can even neglect their social lives. However‚ it is my belief that‚ this is an unavoidable circumstance because money has considerable importance in the economy‚ society and our day to day lives. To begin with‚ if a person has more money‚ he or she has power! In other words‚ money will provide you with a strong social status
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1. award: 1.50 out of 2.50 points The demand curve for product X is given by QXd = 500 - 5PX. a. Find the inverse demand curve. PX = 100 - 0.2 QXd Instructions: Round your answer to the nearest penny (2 decimal places). b. How much consumer surplus do consumers receive when Px = $45? $91.00 c. How much consumer surplus do consumers receive when Px = $25? $95.00 d. In general‚ what happens to the level of consumer surplus as the price of a good falls? The level of consumer surplus
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TUTORIAL 1: DEMAND THEORY 1a) The demand curve for haircuts at Terry Bernard’s Hair Design is P = 15 – 0.15Q where Q is the number of cuts per week and P is the price of a haircut. Terry is considering raising her price above the current price of RM9. Terry is unwilling to raise price of the price hike will cause revenue to fall. Should Terry raise the price of haircuts above RM9? Why or why not? b) Terry is trying to decide on the number of people to employ based on the following
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Rent: Section 4 (a) or Section (d) income? Rental income is generally assessed under Section 4(d) Rental Income of the Income Tax Act and is seen as income from investment. When rental income is assessed under section 4 (d)‚ it has to be grouped into three sources namely residential properties‚ commercial properties and vacant land. The date of commencement of renting is on the first day the property is rented out. In the event a rental loss occurs‚ it becomes a permanent loss because it cannot
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Money Market (Money and Banking) What is Money? A financial asset with the following functions: Medium of exchange: An asset that individuals acquire for the purpose of trading rather than for their own consumption. A store of value: Means of holding purchasing power over time A measure of value (unit of account): Measure used to set prices and make economic calculations 2 What is money? Money is anything that serves as a commonly accepted medium of exchange Money and Income
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