There are seven families in the community. Every family has $40; each family can buy a steer (a cow) for $40 or the family can buy a bond for $40. Every bond will pay the owner of a bond $120 one year from now. However, if a steer is purchased, the revenue from selling a steer depends on the number steers brought to the market as indicated below in the first two columns. Revenue from a steer and the revenue from buying bonds will be paid in one year on the same date. Number of steers Price per steer Total revenue from selling steers Income to bondholders Total income to the community 0 $1,000 $0 $840 $840 1 $850 $850 $720 $1,570 2 $800 $1,600 $600 $2,200 3 $750 $2,250 $480 $2,730 4 $700 $2,800 $360 $3,160 5 $400 $2,000 $240 $2,240 6 $150 $900 $120 $1,020 7 $100 $700 $0 $700 Read the table above 1. Determine how many families will purchase a steer and the income gained by the whole community. 2. Determine the number of families that should purchase and then sell a steer and the income gained by the whole community
B There are seven families in the community. Every family has $40; each family can buy a steer (a cow) for $40 or the family can buy a bond for $40. Every bond will pay the owner of a bond $120 one year from now. However, if a steer is purchased, the revenue from selling a steer depends on the number steers brought to the market as indicated below in the first two columns.
Revenue from a steer and the revenue from buying bonds will be paid in one year on the same date.
|
Number of steers |
|
Total revenue from selling steers |
Income to bondholders |
Total income to the community |
|
0 |
$1,000 |
$0 |
$840 |
$840 |
|
1 |
$850 |
$850 |
$720 |
$1,570 |
|
2 |
$800 |
$1,600 |
$600 |
$2,200 |
|
3 |
$750 |
$2,250 |
$480 |
$2,730 |
|
4 |
$700 |
$2,800 |
$360 |
$3,160 |
|
5 |
$400 |
$2,000 |
$240 |
$2,240 |
|
6 |
$150 |
$900 |
$120 |
$1,020 |
|
7 |
$100 |
$700 |
$0 |
$700 |
Read the table above
1. Determine how many families will purchase a steer and the income gained by the whole community.
2. Determine the number of families that should purchase and then sell a steer and the income gained by the whole community
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