Relationship between price and cost of capital goods

Assignment Help Business Economics
Reference no: EM133082588

PLEASE USE AN AUSTRIAN PERSPECTIVE

On what does the value of capital goods (higher order goods) depend? Can innovation change the value of capital goods that already exist and are part of the production structure? Why is it not valid to use the present price of capital goods to quantify the value of capital? In what sense and under what conditions can we say that the present price of a capital good is equal to its value? What role do expectations play in these conditions? If these conditions are met, what would be the relationship between the price and the cost of capital goods? Remember that cost in economics in general (and in Austrian economics in particular) always refers to opportunity cost.

Reference no: EM133082588

Questions Cloud

Why is it necessary for us to compute our purchases : 1. What are the different considerations when purchasing or buying the materials needed in making the project?
Effect of collusion between bidders in a second-price : In this question we will consider the effect of collusion between bidders in a second-price, sealed-bid auction. There is one seller who will sell one object us
How much food has transformed in the past century : Given how much food has transformed in the past century, what may possibly happen in the future for the food industry? Will it get better or worse in the US?
Specialization in the production : 1. The factor endowments model predicts an increase in wealth inequalities as a result of openness to trade due to the increase in the return on capital.
Relationship between price and cost of capital goods : On what does the value of capital goods (higher order goods) depend? Can innovation change the value of capital goods that already exist and are part of the pro
What are your thoughts on gender-awareness : The idea of gender specific needs and/or treatment is being challenged today. What are your thoughts on gender-awareness?
Different training and development methods : Develop and improve team and individual project team member performance and meet both project and organisational goals
Illustrate how the heckscher-ohlin theorem postulates : Illustrate how the Heckscher-Ohlin theorem postulates the determination of international trade. Provide diagrams where necessary.
What do we mean by root causes of migration : What do we mean by "root causes" of migration? How might the consideration of root causes influence or shift the ways that immigration law and policy are formed

Reviews

Write a Review

Business Economics Questions & Answers

  Homogeneous-agent models and heterogeneous-agent models

What is the difference between homogeneous-agent models and heterogeneous-agent models?

  Why economies of scale should occur in banking industry

There are various theoretical reasons why economies of scale should occur in the banking industry:

  What are the profits of the monopoly in equilibrium

A monopoly produces widgets at a marginal cost of $8 per unit and zero fixed cost. It faces an inverse demand function given by P = 38 – Q and MR = 38 – 2Q. What are the profits of the monopoly in equilibrium? What are the consumer surpluses in equil..

  Specialization and exchange

Specialization and Exchange. Please select one item that you can see from where you are sitting right now – and list and describe as many people as you can think of that played a role in getting that item to where it is right now. (One Limit Only: yo..

  Effective transfer pricing methodology

What is the role of an effective transfer pricing methodology in allowing effective performance measurement?

  Deworming intervention had positive externalities

If the school based deworming intervention had positive externalities, would regression analysis overestimate or underestimate the treatment impact of the progr

  Calculate the annual holding period return

Assuming interest and dividends are paid annually, calculate the annual holding period return on each security. Round answer to 1 decimal place.

  Investment has highest expected value to ordinary investor

Suppose that, as an owner of a federally insured S&L in the 1980s, the price of real estate falls, and most of your loans go into default. In fact, so many loans go into default that the net worth of the S&L is negative ($5 million). Which investment..

  Draw cash-?ow diagram from the companys viewpoint

It is estimated that a certain piece of equipment can save $22,000 per year in labor and materials costs. The equipment has an expected life of ?ve years and no market value. If the company must earn a 15% annual return on such investments, how much ..

  Compute the cv and ev associated with this price increase

Compute the CV and EV associated with this price increase. how would you interpret these.

  Relative positions of the market demand and supply curves

There is currently a surplus of allowances at the price of zero. What must be true of the relative positions of the market demand and supply curves? Explain. If the EPA were to allow firms to use allowances to emit sulfur dioxide as they did in the p..

  Monopoly produces widgets at marginal cost

A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P=50 - Q. Suppose fixed costs rise to $400. What happens in the market?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd