Questions
(f) Let demand for car batteries be such that Q = 100 ? 2P. Assume constant...
(f) Let demand for car batteries be such that Q = 100 ? 2P. Assume constant marginal costs of 25. Compute the equilibrium price, quantity, consumer surplus, producer surplus and if relevant deadweight loss for:
i. A perfectly competitive firm
ii. A monopoly
iii. Two firms engaged in Cournot Competition.
iv. Two firms engaged in Bertrand Competition.
You should explain your work and both define and differentiate all of these equilibrium concepts.
(g) Repeat the above, excluding Bertrand Competition and Stackleberg Competition, for a model where firms have a fixed cost for all production greater than zero of 5 dollars. Using the zero profits as a guide for all possible entrants what would be an outcome perfect competition?
In: Economics
Let’s say that Wakanda decides to form a government. The government is deciding on how much money to release into the economy.
Let’s say that Wakanda decides to form a government. The government is deciding on how much money to release into the economy. Their central bank releases $1,000 into the economy and allows banks to form and start taking deposits and making loans. The central bank also sets a reserve requirement ratio of 0.6.
Assume 15 loans have been made. The banks do not keep excess reserves. What is the amount loaned out for the 16th loan? (Show work)
After all loans have been made, the equilibrium price level is set at $100. Draw the money market graph for Wakanda. (Label with specific values).
Let’s say Wakanda’s central bank continues to buy bonds. What affect will this have on GDP in short run? (Explain)
In: Economics
IS-LM Model (Closed Economy) The following equations describe a small open economy. [Figures are in millions...
IS-LM Model (Closed Economy)
The following equations describe a small open economy.
[Figures are in millions of dollars; interest rate (i) is in percent]. Assume that the price level is fixed.
Goods Market
C = 250 + 0.8YD
YD = Y + TR – T
T = 100 + 0.25Y
I = 300 – 50i
G = 350; TR = 150
Money Market
L = 0.25Y – 62.5i
Ms/P = 250
Goods market equilibrium condition: Y = C + I + G + X-M
Money market equilibrium condition: L = Ms/P
a) What is the equation that describes the IS curve (YIS)?
b) What is the equation describing the LM curve (YLM)?
c) What are the equilibrium levels of income (Yo) and interest rate (io)
In: Economics
Ziggy sells and delivers a semi-trailer load of steel reinforcing bars to Barb. Unless otherwise agreed, it is Ziggy’s obligation to furnish some means of lifting the steel bars of the semi-trailer.
True or False:
Ziggy sells and delivers a semi-trailer load of steel reinforcing bars to Barb. Unless otherwise agreed, it is Ziggy’s obligation to furnish some means of lifting the steel bars of the semi-trailer.
Timory agrees to sell to Art some copper valves that are in the possession of a warehouseman. If the valves are not to be moved, Timory’s delivery obligation is completed when she delivers some form of document of title to Art.
FOB is both a price and a delivery term.
A seller in Milwaukee who is required to deliver bratwurst to a buyer in Atlanta, “FOB Milwaukee,” has entered into a destination contract.
Unless otherwise specified in a contract for the sale of goods, a shipment contract is presumed.
100. In a “C&F” contract, the goods must be shipped “FAS” shipping point.
In: Operations Management
Company prepared the following contribution format income statement based on a sales volume of 1,000 units...
Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):
| Sales | $ | 70,000 |
| Variable expenses | 38,500 | |
| Contribution margin | 31,500 | |
| Fixed expenses | 23,310 | |
| Net operating income | $ | 8,190 |
5. If sales decline to 900 units, what would be the net operating income?
6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?
If the variable cost per unit increases by $1, spending on advertising increases by $1,600, and unit sales increase by 220 units, what would be the net operating income?
What is the break-even point in unit sales?
In: Accounting
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000...
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):
| Sales | $ | 60,000 |
| Variable expenses | 39,000 | |
| Contribution margin | 21,000 | |
| Fixed expenses | 14,700 | |
| Net operating income | $ | 6,300 |
1. What is the variable expense ratio?
2. If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.)
3. If sales decline to 900 units, what would be the net operating income?
4. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?
In: Accounting
Use the following to answer questions 7-8: The following table represents buyers' values and sellers' costs from a market experiment like the one you did in recitation
Use the following to answer questions 7-8:
The following table represents buyers' values and sellers' costs from a market experiment like the one you did in recitation. The same assumptions apply: each agent may make only one transaction and fractions of a unit may not be traded.
7. Using the data from the market experiment, which of the following is closest to the total surplus generated in this market?
A) 160 B) 410 C) 530 D) 950
8. Using the data from the market experiment in the table above, which of the following is closest to the minimum deadweight loss that would arise from a price floor set at $300
A) 0 B) 30 C) 100 D) 250 g
In: Economics
The 10.3 percent preferred stock of Avogadro Numerics is selling for $50 a share. What is...
The 10.3 percent preferred stock of Avogadro Numerics is selling for $50 a share. What is the firm's cost of preferred stock if the tax rate is 39.1 percent and the par value per share is $100?
The Poisson Distributors has a cost of equity of 15 percent and a pre-tax cost of debt of 8.7 percent. The firm's target weighted average cost of capital is 11.3 percent and its tax rate is 28.1 percent. What is the firm's target debt-equity ratio
Heisenberg's Casinos would like to issue new equity shares if its cost of equity declines to 9.2 percent. The company pays a constant annual dividend of $1.86 a share. What does the market price of the stock need to be for the firm to issue the new shares?
In: Finance
ABC Company produces three products: A, B, and C. The company only has 300 labor hours...
ABC Company produces three products: A, B, and C. The company only has 300 labor hours per week to produce these 3 products. Product information is as follows:
A B C
Unit selling price 140 75 240
Unit variable Costs 100 50 180
Unit contribution margin 40 25 60
Labor hours per unit 5 4 6
Maximum demand in units per week 15 20 30
What is the optimal product mix(how many A, B, and C should be produced) the company would produce for a week based on only having 300 labor hours and the demand for each product? Explain your answer and show computations.
In: Accounting
On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The...
On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics.
| Programmer | Executive | |||||
| Selling price per bag | $ | 70 | $ | 100 | ||
| Variable cost per bag | $ | 40 | $ | 40 | ||
| Expected sales (bags) per year | 7,000 | 10,500 | ||||
The total fixed costs per year for the company are $666,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?
In: Accounting