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1

Economics

1. For the given cash flow diagram, calculate the equivalent value at year 10. 600 500 400 400 i=8% 300 300 200 0 1 2 3 5 10 11 12 13 14 15 400 450 500 550

2.hear's a scenario! You can attend the school without a fee, but the benefits are limited that you can produce from the study as your benefit is only high grade on your test. If you are an economist, would you continue to attend school or just choose other alternatives? explain it with the "Opportunity Cost"

3.Price II. Analysis (20 pts) Supply and demand curves So and Do represent the onginal situation in the market for top quality Brahma bulls. Use information from the figure to answer these questions about this market. a What is the original equilibrium price? The Brahma Bull Market Quantity? S. b. If demand moves to D, because dietitians recommend that all people over 40 become ?. vegetanans, what is the new equilibrum price? Quantity? c. Beginning with the original curves, if supply shifts to S1 with the introduction of beef-up Po antibiotics, what is the new market-clearing price? Quantity? d. Assuming simultaneous shifts to D, and Si. what is the new equilibrium price? Quantity Quantity? e. The movement from point a to point e represents what on the demand side? What on the supply side? f The movement from point a to point b represents what on the demand side? What on the supply side? & The movement from point b to point d represents what on the demand side? What on the supply side? h The movement from point c to point d represents what on the demand side? What on the supply side? i Looking only at the original set of demand and supply curves (Do. So, what would occur if the price were set at P2 Why?

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1.Equivalent value at year 10 means that we have to calculate future value of payments made till year 9 in respect to year 10 while past value of payments made between year 11 and 15 in respect to year 10.

Future valye of payment is calculated as: [Payment * (1 + Interest rate)^Payment deposited for year]

Year Payment Payment deposited for years Future value of payment
0 - - -
1 300 9 599.70
2 400 8 740.37
3 400 7 685.53
4 400 6 634.75
5 400 5 587.73
6 -400 4 -544.20
7 -450 3 -566.87
8 -500 2 -583.20
9 -550 1 -594.00
      959.82

Past value of payment:

Past valye of payment is calculated as: [Payment / (1 + Interest rate)^Payment deposited for year]

Year Payment Payment deposited for years Past value of payment
11 200 1 185.19
12 300 2 257.20
13 400 3 317.53
14 500 4 367.51
15 600 5 408.35
      1,535.78

Total equivalent value at year 10 = 959.82 + 1,535.78 = 2,495.60

2.

s per concept of “Opportunity cost”,

As a Economist I have to discuss whether choose go to school or alternatives?

In this Question/case study if have chance to choose “School without a fee”, then it is Beneficial for me my Education Do free of cost, it is the first thing.,

Second Thing, with the school If I am not getting any thing instead of high grade in degree or on test.

But As per “opportunity cost Concept”, if I left something which is related to my earnings and choose School then the “earning source” is “opportunity cost” for me,

But in this Question/case study I don't left anything, just have to choose as alternative for earning which is future decision.,

Here 2 things are very important,

1. After completion of school I can get good job which will give me better salary compare to Choose current Alternatives., That's why choose School is better then choose alternatives.,

But in this case study or Question, is only related to If I Get Only High Grade in Test, and If it is only Benefit of Choose school for me.,

2. Then definitely go for Alternatives” is better option., Because after completion of school did not give me anything, So Wasting Year May be included in “Opportunity Cost” instead of high-grade In Test.

And After choose alternatives, it can be resource of my earnings, that's why choose alternatives is better option, if nothing benefits I will got from school in future.,

If I choose school, in this situation then Choose alternatives will be “opportunity cost” for me because I lost these alternatives resources Earning if I go for School.,

Simply here are two to perceptions As per “Economist” Theory, in “Opportunity Cost” Concept.

3.

a. P3, Q1 ( Because intersection of demand Do and So)

b.P2, Qo ( Because intersection of demand D1 and So)

c.P1 , Q3 ( Because intersection of Do and S1 )

d. Po, Q2 ( because intersection of D1 and S1)