Black & White Computing is putting together its R&D budget for the coming year. The firm has compiled a list of potential research and development projects and estimated the interest rate and amount of financial capital required for various levels of R&D spending. The data collected is shown in the table below. Graph Black & White Computing's demand curve for financial capital when the firm receives only the private benefit of investing in R&D. Interest Dprivate (in Dsocial (in Point Rate millions) millions) A 11% $2 $3 B 9% $3 $6 7% $4 $9 D 5% $7 $12 3% $10 $15

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Black & White Computing is putting together its R&D budget for the coming year. The firm has compiled a list
of potential research and development projects and estimated the interest rate and amount of financial
capital required for various levels of R&D spending. The data collected is shown in the table below.
Graph Black & White Computing's demand curve for financial capital when the firm receives only the private
benefit of investing in R&D.
Interest
Dprivate (in
Dsocial (in
Point
Rate
millions)
millions)
A
11%
$2
$3
B
9%
$3
$6
7%
$4
$9
D
5%
$7
$12
E
3%
$10
$15
Provide your answer below:
10
-5-
2) A (5-2) B(10,2) G (15, 2)
D(20-2) E
10
20
15
Financial capital (in millions $)
Rate of return (%)
Transcribed Image Text:Black & White Computing is putting together its R&D budget for the coming year. The firm has compiled a list of potential research and development projects and estimated the interest rate and amount of financial capital required for various levels of R&D spending. The data collected is shown in the table below. Graph Black & White Computing's demand curve for financial capital when the firm receives only the private benefit of investing in R&D. Interest Dprivate (in Dsocial (in Point Rate millions) millions) A 11% $2 $3 B 9% $3 $6 7% $4 $9 D 5% $7 $12 E 3% $10 $15 Provide your answer below: 10 -5- 2) A (5-2) B(10,2) G (15, 2) D(20-2) E 10 20 15 Financial capital (in millions $) Rate of return (%)
The graph below shows the budget constraint between income and leisure for an individual. For every hour spent in leisure,
one less hour is spent working and vice versa. Move the budget constraint to illustrate the trade off that exists when the
individual can earn $25,000 if he/she works 4,000 hours, assuming the individual does not qualify for government support.
Assume that the individual only has 4,000 hours to distribute between work and leisure.
Provide your answer below:
35000
30000
25000-
20000-
15000
(0, 14000)
10000-
5000
(2200, 0)
4000
5000
Leisure (Hours)
1000
2000
3000
Income ($)
Transcribed Image Text:The graph below shows the budget constraint between income and leisure for an individual. For every hour spent in leisure, one less hour is spent working and vice versa. Move the budget constraint to illustrate the trade off that exists when the individual can earn $25,000 if he/she works 4,000 hours, assuming the individual does not qualify for government support. Assume that the individual only has 4,000 hours to distribute between work and leisure. Provide your answer below: 35000 30000 25000- 20000- 15000 (0, 14000) 10000- 5000 (2200, 0) 4000 5000 Leisure (Hours) 1000 2000 3000 Income ($)
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