PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 17, Problem 22RQ
Why should a financial investor care about diversification?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
At the 8:10 café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (that is she cannot price discriminate).
Students with early classes
Students without early classes
Coffee
70
60
Banana
50
100
The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? HINT: if you sell the bundle, can you make more by offering coffee separately?
If so, what price should be charged for the bundle? (Show calculations)
Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.
Use the following demand data:
Group
Value
Frequency
Baby boomers
$5
20%
Generation X
$4
10%
Generation Y
$3
10%
`Tweeners
$2
10%
Seniors
$2
10%
Others
$0
40%
Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.
Group
Value
Frequency
Baby boomers
$5
20%
Generation X
$4
10%
Generation Y
$3
10%
`Tweeners
$2
10%
Seniors
$2
10%
Others
$0
40%
ur marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.
Chapter 17 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 17 - Answer these three questions about early-stage...Ch. 17 - From a firms point of view, how is a bond similar...Ch. 17 - Calculate the equity each of these people has in...Ch. 17 - Which has a higher average return over time:...Ch. 17 - Investors sometimes fear that a high-risk...Ch. 17 - What is the total amount of interest from a 5,000...Ch. 17 - If you receive 500 in simple interest on a loan...Ch. 17 - You open a 5-year CD for 1,000 that pays 2...Ch. 17 - What are the- most common ways for start-up firms...Ch. 17 - Why can firms not just use their own profits for...
Ch. 17 - Why are banks more willing to lend to...Ch. 17 - What is a bond?Ch. 17 - What does a share of stock represent?Ch. 17 - When do firms receive money from a stock sale in...Ch. 17 - What is a dividend?Ch. 17 - What is a capital gain?Ch. 17 - What is the difference between a private company...Ch. 17 - How do the shareholders who own a company choose...Ch. 17 - Why are banks called financial intermediaries?Ch. 17 - Name several different kinds of bank account. How...Ch. 17 - Why are bonds somewhat risky to buy, even though...Ch. 17 - Why should a financial investor care about...Ch. 17 - What is a mutual fund?Ch. 17 - What is an index fund?Ch. 17 - How is buying a house to live in a type of...Ch. 17 - Why is it hand to forecast future movements in...Ch. 17 - What are the two key choices U.S. citizens need to...Ch. 17 - Is investing in housing always a very safe...Ch. 17 - If you owned a small firm that had become somewhat...Ch. 17 - Explain how a company can fail when the safeguards...Ch. 17 - What are some reasons why the investment strategy...Ch. 17 - Explain why a financial investor in stocks cannot...Ch. 17 - Explain what happens in an economy when the...Ch. 17 - You and your friend have opened an account on...Ch. 17 - How do bank failures cause the economy to go into...Ch. 17 - The Darkroom Windowshade Company has 100,000...Ch. 17 - Imagine that a local water company issued 10,000...Ch. 17 - Suppose Ford Motor Company issues a five year bond...Ch. 17 - How much money do you have to put into a bank...Ch. 17 - Many retirement funds charge an administrative fee...
Additional Business Textbook Solutions
Find more solutions based on key concepts
11-13. Discuss how your team is going to identify the existing competitors in your chosen market. Based on the ...
Business Essentials (12th Edition) (What's New in Intro to Business)
Quick ratio and current ratio (Learning Objective 7) 1520 min. Consider the following data COMPANY A B C D Cash...
Financial Accounting, Student Value Edition (5th Edition)
The meaning of leverage ratio of a call. Introduction: A leverage ratio is intended to assess an organization’s...
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
(Record inventory transactions in the periodic system) Wexton Technologies began the year with inventory of 560...
Financial Accounting (12th Edition) (What's New in Accounting)
The cost of capital. Introduction: The cost of capital is the opportunity cost involved in making a specific in...
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Knowledge Booster
Similar questions
- Test Preparation QUESTION 2 [20] 2.1 Body Mass Index (BMI) is a summary measure of relative health. It is calculated by dividing an individual's weight (in kilograms) by the square of their height (in meters). A small sample was drawn from the population of UWC students to determine the effect of exercise on BMI score. Given the following table, find the constant and slope parameters of the sample regression function of BMI = f(Weekly exercise hours). Interpret the two estimated parameter values. X (Weekly exercise hours) Y (Body-Mass index) QUESTION 3 2 4 6 8 10 12 41 38 33 27 23 19 Derek investigates the relationship between the days (per year) absent from work (ABSENT) and the number of years taken for the worker to be promoted (PROMOTION). He interviewed a sample of 22 employees in Cape Town to obtain information on ABSENT (X) and PROMOTION (Y), and derived the following: ΣΧ ΣΥ 341 ΣΧΥ 176 ΣΧ 1187 1012 3.1 By using the OLS method, prove that the constant and slope parameters of the…arrow_forwardQUESTION 2 2.1 [30] Mariana, a researcher at the World Health Organisation (WHO), collects information on weekly study hours (HOURS) and blood pressure level when writing a test (BLOOD) from a sample of university students across the country, before running the regression BLOOD = f(STUDY). She collects data from 5 students as listed below: X (STUDY) 2 Y (BLOOD) 4 6 8 10 141 138 133 127 123 2.1.1 By using the OLS method and the information above derive the values for parameters B1 and B2. 2.1.2 Derive the RSS (sum of squares for the residuals). 2.1.3 Hence, calculate ô 2.2 2.3 (6) (3) Further, she replicates her study and collects data from 122 students from a rival university. She derives the residuals followed by computing skewness (S) equals -1.25 and kurtosis (K) equals 8.25 for the rival university data. Conduct the Jacque-Bera test of normality at a = 0.05. (5) Upon tasked with deriving estimates of ẞ1, B2, 82 and the standard errors (SE) of ẞ1 and B₂ for the replicated data.…arrow_forwardIf you were put in charge of ensuring that the mining industry in canada becomes more sustainable over the course of the next decade (2025-2035), how would you approach this? Come up with (at least) one resolution for each of the 4 major types of conflict: social, environmental, economic, and politicalarrow_forward
- How is the mining industry related to other Canadian labour industries? Choose one other industry, (I chose Forestry)and describe how it is related to the mining industry. How do the two industries work together? Do they ever conflict, or do they work well together?arrow_forwardWhat is the primary, secondary, tertiary, and quaternary levels of mining in Canada For each level, describe what types of careers are the most common, and describe what stage your industry’s main resource is in during that stagearrow_forwardHow does the mining industry in canada contribute to the Canadian economy? Describe why your industry is so important to the Canadian economy What would happen if your industry disappeared, or suffered significant layoffs?arrow_forward
- What is already being done to make mining in canada more sustainable? What efforts are being made in order to make mining more sustainable?arrow_forwardWhat are the environmental challenges the canadian mining industry face? Discuss current challenges that mining faces with regard to the environmentarrow_forwardWhat sustainability efforts have been put forth in the mining industry in canada Are your industry’s resources renewable or non-renewable? How do you know? Describe your industry’s reclamation processarrow_forward
- How does oligopolies practice non-price competition in South Africa?arrow_forwardWhat are the advantages and disadvantages of oligopolies on the consumers, businesses and the economy as a whole?arrow_forward1. After the reopening of borders with mainland China following the COVID-19 lockdown, residents living near the border now have the option to shop for food on either side. In Hong Kong, the cost of food is at its listed price, while across the border in mainland China, the price is only half that of Hong Kong's. A recent report indicates a decline in food sales in Hong Kong post-reopening. ** Diagrams need not be to scale; Focus on accurately representing the relevant concepts and relationships rather than the exact proportions. (a) Using a diagram, explain why Hong Kong's food sales might have dropped after the border reopening. Assume that consumers are indifferent between purchasing food in Hong Kong or mainland China, and therefore, their indifference curves have a slope of one like below. Additionally, consider that there are no transport costs and the daily food budget for consumers is identical whether they shop in Hong Kong or mainland China. I 3. 14 (b) In response to the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning