Using examples of goods or services you are familiar with, explain how does the knowledge of price elasticities helps these two entities to make pricing decisions.

(a) A very popular fried koay teow seller in Penang. (400 words)

(b) A fashion boutique. (400 words)

A newly issued bond pays its coupons once annually. Its coupon rate is 8.5%, its maturity is 20 years, and its yield to maturity is 10.5%.

a. Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 9.5% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. If you sell the bond after one year, what taxes will you owe if the tax rate on interest income is 40% and the tax rate on capital gains income is 30%? The bond is subject to original-issue discount tax treatment. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

c. What is the after-tax holding-period return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. Find the realized compound yield before taxes for a 2-year holding period, assuming that (1) you sell the bond after two years, (2) the bond yield is 9.5% at the end of the second year, and (3) the coupon can be reinvested for one year at a 3% interest rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

e. Use the tax rates in (b) above to compute the after-tax 2-year realized compound yield. Remember to take account of OID tax rules. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Explain the impact of the national debt on capital markets and future living standards. What are the consequences of the vastly increased foreign holdings of US debt? What are the consequences if the debt is paid off?

Given the following information for a monopolistic competitor:

Demand: P = 78 – 5(Q)

Marginal revenue: MR = 78 – 10(Q)

Marginal cost: MC = 2(Q) + 10

Average total cost at equilibrium is 14

1. At what output (Q) will this firm maximize profit? _____

2. At what price (P) will this firm maximize profit? _______

3. What is the total revenue (TR) earned at this output level? _____

4. What is the total cost (TC) accrued at this output? _____

5. What profit or loss is experienced by this firm? ______

6. Could this firm be in a longrun situation? (answer 1 = yes, 2 = no) _____

Why does the auto industry prefer uniform (national) standards for automobile emissions as opposed to regionally varying standards? Are uniform standards beneficial to everyone?

Explain how the shape of the load duration curve for a particular system affects the selection of technology mix

Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per week that they can use to produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor.

Initially, suppose Arcadia uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce rye, while Dolorium uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce rye. Consequently, Arcadia produces 6 million pairs of jeans and 36 million bushels of rye, and Dolorium produces 12 million pairs of jeans and 16 million bushels of rye. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and rye it produces.

Arcadia's opportunity cost of producing 1 pair of jeans is of rye, and Dolorium's opportunity cost of producing 1 pair of jeans is of rye. Therefore, has a comparative advantage in the production of jeans, and has a comparative advantage in the production of rye.

Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will producemillion pairs per week, and the country that produces rye will producemillion bushels per week.

In the following table, enter each country's production decision on the third row of the table (marked “Production”).

Suppose the country that produces jeans trades 14 million pairs of jeans to the other country in exchange for 42 million bushels of rye.

In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked “Trade Action,” and enter each country's final consumption of each good on the line marked “Consumption.”

When the two countries did not specialize, the total production of jeans was 18 million pairs per week, and the total production of rye was 52 million bushels per week. Because of specialization, the total production of jeans has increased bymillion pairs per week, and the total production of rye has increased bymillion bushels per week.

Because the two countries produce more jeans and more rye under specialization, each country is able to gain from trade.

Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked “Increase in Consumption”).

Consider a consumer’s consumption-saving decision in a two-period model. Suppose that the real interest rate is r. This consumer’s current income is y and the future income is y’ . The government imposes lumpsum taxes t and t’ in the current period and future period, respectively. In addition, the government subsidizes savings with rate q: the consumer needs to pay 1 /(1+q) to save one unit of consumption. That is, the budget constraint of the current period is c + s/( 1 + q) = y − t.

(a) (10 points) Derive the lifetime budget constraint. Graphically illustrate this person’s budget constraint, endowment point, and optimal choice. Assume that this consumer is the lender (saver).

(b) (10 points) What will be the effects of decreasing q on (c, c’ , s), respectively? Assume that this consumer remains as the lender, and the substitution effects are dominating. Explain.

Show by graphing how a change (upward shift or downward shift) in each of the following factors would alter the shape of the total product curve for medical care. A. An increase of education spending. B. An improvement in lifestyle. C. An improvement in the environment.

What are the basic differences between proprietary and public companies?

there are 5 basic differences between proprietary and public companies.

Given that labor is a resource that needs to be used efficiently, what responsibility do you feel the government has in decreasing unemployment? Does the negative relationship between inflation and unemployment have any impact on your decision?