Isabella buys a $1,000 bond that matures in 10 years (that is, she lends $1,000 to the U.S. Treasury for 10 years). The bond pays her $50 every year for 10 years. When the bond matures at year 10, she will receive her $1,000 back.
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Suppose there is an increase in supply (rightward shift in supply). Consider two graphs. In Graph [X], demand is relatively inelastic. In Graph [Y], demand is relatively elastic. Which of the following is true?Suppose Bill gets a pay raise of 12%, ..
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Real Disposable Income Planned Real Consumption 0 3,000 2,000 4,400 4,000 5,800 6,000 7,200 8,000 8,600 10,000 10,000 12,000 11,400 14,000 12,800 Refer to Table 12.1. The table gives the combinations of income and consumption.
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elizabeth M. suburbs makes $200 a week at her summer job and spends her entire weekly income on running shoes and designer jeans, because these are the only two items that provide utility to her. Furthermore, Elizabeth insists that for every pair ..
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Let MUa=Z=10-x and MUb=Z=21=2y, where z is marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $10 to spend on A and B- that is, x=y=10. How is the..
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The unit cost of a console to Nintendo is $30, and of a game to Sega is $10. Suppose, each month, Nintendo considers prices $250 and $350 for consoles, and Sega considers $40 and $50 for games.
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What will happen to the price of the bond that pays $3 per year (Suppose that interest rates are 6% in the economy and a safe bond promises to pay $3 per year in interest forever. What do you think the price of the bond will be Why
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Consider the market for a product with two types of potential users: those in proportion f have inverse demand schedule P = 5 - 0.5 Q, while the remaining 1 - f have inverse demand P = 10 - Q. Normalize the total number of consumers to 1, and let..
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consider the following cobb-douglas production function for the bus transportation system in a particular city: Q = aL(B1)F(B2)K(B3) where L = labor input in worker hours F = fuel input in gallons K = capital input in munber of buses Q = output me..
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An economy has only two goods, whose prices and typical consumption quantities are as follows: Dec. 2010 Dec. 2011 Price Quantity Price Quantity Fruit (lbs) $1.00 100 $1.00 50 Nuts (lbs) $3.00 50 $4.00 25 a. Using December 2010 as the base period f..
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What will be the net future worth at the end of year 12 of the following income and expenses at an interest rate of 10% per year: Year Income, $ Expenses, $ 0 15,000 11,000 6 - 12 8,000 4,000 1 - 5 9,000 5,000
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Consider an investment project with the following cash flows: n Porject A Project B 0 -$150,000 -$120,000 1 $30,000 $25,000 2 $25,000 $15,000 3 $120,000 $110,000 A) Compute the IRR for each investment B) At MARR= 15% determine the acceptability of ..
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