Answered: Asset prices rose since April 2020 due…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Industry demand and supply for a new soft drink NeuCola is as follows:Qd = 460,000 – 100,000 P + 22,500 Pc + 21 Y + 2,000 TQs = 40,000 + 80,000 P – 60,000 PL – 5,000 Pk Where P is the average price of the drink in $ per pack, Pc is the average wholesale price of other branded drinks in the market, Y is income in $, T is the average daily temperature in degrees, PL is the average wage of labor in $ per hour and Pk is the average cost of capital in $. a.When quantity is expressed as a function of price, what are NeuCola’s demand and supply curves if Pc = $8, Y=$10,000 billion, T=75 degrees, PL=$10, and Pk=$12. b., Will, there be a surplus or shortage of NeuCola when P = $5, $7, and $9? Use a table to show values of quantity demanded and quantity supplied at each level of price. (Values of Qd and Qs calculated in millions may be rounded in the table).c.Calculate the market equilibrium price and equilibrium output.d.Draw a labeled hypothetical demand and supply model clearly indicating…
Assume that the three-month forward rate between $ and 1£ is FR= $1.225/1£ and a speculator believes that the spot rate in three months will be SR= $1.305/1£. How can he/she speculate in the forward market with $500,000? Explain and calculate the profit. Please provide a full explanation.
Answer the attached question
Trade discounts may be stated in series. Assume instead that the trade discount given by the computer shop to the buyer is 20% and 10% for seven units of tablet computers amounted to P17,500 quoted price, the invoice price will be
The price of bauxite increased to its highest level due to conditions which impacted supply. Historically, bauxite has traded at between 1500 and 1600 USD per tonne. But the price increased to over 1900 USD in November 2020. Growing demand in Canada for bauxite to be turned into aluminium, coupled with a sharp fall in Jamaican production have both been factors in the price increase. Bauxite production in Jamaica for 2017-18 fell 65% year-on-year due to flood conditions causing damages as well as increased competition. The London Metal Exchange predicts that global consumption of bauxite is likely to be greater than production by 20 million tonnes next year. In the US, companies in the steel and petrol industry have put pressure on the US government to relax import controls, warning that otherwise they might run out of bauxite. Commentators predict that most steel and petrol producers will be unaffected because bauxite is such a small part of their spending. Illustrate the predictions…
You are the marketing manager of the Business Unit (BU) that produces polystyrene (which is an input to making lightweight rigid foam). The current Demand/Supply balance, as measured by the ICIS price, is $800 per ton of polystyrene. The BU has 2 plants and can produce a total of 1800 tons. At full capacity utilization, the BU’s average variable cost equals $1300/t and its average total cost equals $1700/t.Plant 1 has a capacity of 600 tons and a marginal cost of $900/t. Plant 2 has capacity of 1200 tons and a marginal cost of $1500/t. Due to exit of one competitor, you expect next year’s polystyrene ICIS price to increase to $1200. 1. How much volume of polystyrene do you expect to produce next year, if any? 2. What is your expected contribution margin for next year? 3. What is your expected profit for next year?
The market demand for a monopoly firm is estimated to be: Qd = 80,000 -400P + 3M + 2000PR where Q is output, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $60,000 and $15, respectively, in 2018. For 2018, the forecasted demand function is…
Calculate operating surplus if:- Rent and interest = $600 Corporate tax = $400 Dividend = $1500 Undistributed profit = $660
Consider the “Trip Logistic” example discussed in class (i.e. base case). Please solve the same problem with each of the following changes, and compare the results with those of the basecase: a) The spot market price (in period 0) is reduced to $0.55 per sq. ft. per year. Assume that everything else remains the same as the base-case. b) There is a lower demand uncertainty: Demand can go up by 5% with p= 0.5 or down by 5% with 1 − p= 0.5. Assume that everything else remains the same as the base-case.
Based on arguments made by Friedman and Fama, which of the following requirements must be fulfilled for noise traders to affect markets in equilibrium? Select all that apply. Noise traders must be able to survive economically for a significant period of time All traders must be risk averse Technical trading must be profitable at least some of the time Noise trader behavior must be systematic
Bayline Boats has an average payroll of $100,000 during the past year, as well as unemployment contributions of $20,000 and benefits paid out of $7,000. This results in a reserve ratio of:
Apply the properties of functions to correctly determine and interpret the break-even point in the following situations, using valid mathematical procedures and correct mathematical notation. Express your answer in terms of the context of the problem. The supply and demand equations for a certain product are: (1) and (2) respectively, where p represents the price per unit in dollars and q, the number of units sold per period. 3q - 200p + 1800 = 0 3q + 100p - 1800 = 0 Algebraically find the equilibrium price. Find and interpret the equilibrium price when a supplier tax of 27 cents per unit is imposed.

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Asset prices rose since April 2020 due to the resolution of the uncertainty related to the COVID-19 pandemic. Use the basic asset pricing formulas to rationalize the performance of asset prices.