In: Economics
A family is considering installing a household solar energy system. The system has an installed cost of $1,100 and they reduce the homeowner’s energy bill by$350 per year. The residual value of the solar panels is $360 at the end of their 5-year life. What is the annual effective IRR of this investment? Assume the family has a MARR of 10%. Please use the interpolation method.
In: Economics
What is the estimated total cost of the crisis in each of these three countries?USA, UK, and Germany State clearly the source of the estimates. What factors explain most of the total cost of the crisis in each of the countries??
In: Economics
What are anchored inflationary expectations and how do they reduce the cost of an adverse inflation shock?
In: Economics
Your company just purchased a piece of equipment. The maintenance cost of the equipment is estimated at $1,200 for the first year and it is to rise by $200 each year. How much should be set aside now to have enough to cover for the maintenance cost for the next 7 years? Assume payments are made at the end of each year and an interest rate of 4%.
In: Economics
Suppose that there is “dominant” firm with total cost function of c(q) = 100 + 10q + 0.25q2. It faces a market demand function (inverse) of p = 100 − 0.5Q, where Q indicates total market supply. This dominant firm has to deal with 10 fringe firms, each of whom behaves perfectly competitively. Each fringe firm has a marginal cost function dc(q)/dq = 20q + 25
a) Calculate the supply function of the fringe firmsIn: Economics
With the help of graph explain the Ricardian theory of trade under increasing cost of production (bow shaped ppf).
In: Economics
Suppose the firm is producing a quantity on the downward sloping portion of its average cost curve. What does this imply about its production function at that quantity?
In: Economics
Suppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations: B(Q) = 50 + 18Q – 2Q^2 and C(Q) =40 + 6Q.
(i) What is the equation for the net benefits?
(ii) What is the equation for the marginal net benefits.
(iii) What level of Q maximizes net benefits?
In: Economics
When entry and exit behavior of firms in an industry does not affect a firm's cost structure,
a. the long-run market supply curve must be horizontal.
b. the long-run market supply curve must be upward-sloping.
c. the long-run market supply curve must be downward-sloping.
d. we do not have sufficient information to determine the shape of the long-run market supply curve.
In: Economics