The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

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Answer 1

Question

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

Answer 6

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

Answer 7

Chapter 21, Problem 1P

To determine

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Answer 8

Expert Solution & Answer

Explanation of Solution

The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Stock:

The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.

Answer 12

Ch. 21 - Prob. 1P Ch. 21 - Prob. 2P Ch. 21 - Prob. 3P Ch. 21 - Prob. 4P Ch. 21 - Prob. 5P Ch. 21 - Prob. 6P Ch. 21 - Prob. 7P Ch. 21 - Prob. 8P Ch. 21 - Prob. 9P Ch. 21 - Prob. 10P

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

To explain: The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.

Explanation of Solution

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Chapter 21 Solutions

To explain:

The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.