Create new prices and new exchange rate that will yield ppp

Assignment Help Macroeconomics

Reference no: EM1347513

Q. CARICOM Products Limited production function is lnQ = 4.63 + 0.392lnK + 0.824lnL. Given that price of labour (L) is $40 and the price of capital (K) is $20. How do you get the optimal mix?

Q. Create an example of automobile prices in London and New York where PPP holds. Assume initially that the exchange rate is $2 per pound, and a particular car sells for $20,000 in New York and 10,000 pounds in London. Create new prices and a new exchange rate that will yield PPP.

Reference no: EM1347513

Questions Cloud

Question on cvp analysis : Compute the annual breakeven point in dollar and in unit sales for shop 48? Make a CVP graph showing cost and revenue data for shop 48 from zero level activity up to 17,000 pairs of shoes sold in year, what would be shop 48's net operating income o..

What angle should the polarizing direction of middle sheet : What is the net force exerted by these two charges on the third charge = 46.5 placed between and at = -1.235 ? Your answer may be positive or negative, depending on direction of the force.

Mispriced bond : An twelve year payment corporate bond has a market value of dollar 925. It pays yearly interest of dollar 60 and its required rate of return is 7 percent.

Calculate roots of function by newton-raphson approximation : Best known iterative method for calculating roots of a function f (that is, x-values for which f(x) is 0) is Newton-Raphson approximation.

Create new prices and new exchange rate that will yield ppp : Assume initially that the exchange rate is $2 per pound, and a particular car sells for $20,000 in New York and 10,000 pounds in London. Create new prices and a new exchange rate that will yield PPP.

Question related to trade-off theory : Other things equal, firms with high corporate tax rates should use less debt financing than firms with low tax rates.

Find the total expected dollar capital gain : Suppose Mr. Jim owns 1,500 shares of stock in corporation X. firm X's 18,750 shares outstanding are publicly sold and come with a pre-emptive right. They are currently trading at 27 dollar each share.

Explaining quasi-legal activities over internet : Online gambling and buying of pharmaceutical drugs over the Internet are quasi-legal activities which can only take place as Internet allows the parties offering gambling.

Analysis of cost of equity : why don't financial managers use as little debt as possible to keep the cost of equity down - Analysis of Cost of equity

User Account

All Pages