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Jon Mitchell runs a small, very stable newspaper company in northern Georgia. The paper has been in business for 23 years. The total value of the firm's stock is $2 million, which Jon owns outright. This year the firm earned a total of $500,000 after out-of pocket expenses. Without taking the opportunity cost of capital into account, this means that Jon is earning 25 percent return on his capital. Suppose that risk-free bonds are currently paying a rate of 10 percent to those who buy is them.
a. What meant by the "opportunity cost of capital"?
b. Explain why opportunity costs are "real" even though they do not necessarily involve out-of-pocket expenses.
c. What is the opportunity cost of Jon's capital?
d. How much excess profit is Jon earning?
Suppose which major function of profit is to allocate resources according to consumer preferences
Her salary rate is $8 every hour and she has 15 hours per day to allocate between labor and leisure.
In the context of a supply demand diagram of low skill labour market, a minimum wage above competitive equilibrium will decrease employment relative to competitive equilibrium.
Which would NOT be advocated by modern conservatism Free markets , Small governments ,Laissez-faire economics , Welfare programs , Reliance on tradition.
Paul Volker was chairman of Federal Reserve system in the late 1970 and through most of the 1980.
Describe pricing strategy to meet organizational goals.
Elucidate how would the presence of these agricultural policies affect the results of such tests.
Why might it be difficult for the Fed to formally adopt inflation targeting? Would inflation targeting be a good policy for the Fed in the present economic environment
Prove that a risk-averse von Neumann-Morgenstern perticular will over-insure, fully-insure, or under-insure according as the insurance is available
The average price/gallon of gass in July over the past 4 years was $2.74, $3.65, $3.45, and $3.63. Use linear regression to predict the price of gas the following year? How would I set up this problem? Do I use years as my x variable?
Are there any current subsidy or welfare issues?
At the end of 1987, you bought a piece of land for $35,000. In addition to the $35,000, you paid $1,700 in closing costs (costs associated with the purchase and title registration). For the years 1988 through 2002, you paid, on average, $950 in pr..
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