Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
8th Edition
ISBN: 9781337292603
Author: Mankiw
Publisher: Cengage Learning (2018)
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Chapter 26, Problem 4PA
To determine
The consumption, government purchases, national savings and investment.
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Students have asked these similar questions
Joy's Frozen Yogurt shops have enjoyed rapid growth in northeastern states in recent years. From
the analysis of Joy's various outlets, it was found that the demand curve follows this pattern:
Q=200-300P+1201 +657-250A +400A;
where Q = number of cups served per week
P = average price paid for each cup
I = per capita income in the given market (thousands)
Taverage outdoor temperature
A competition's monthly advertising expenditures (thousands)
=
A; = Joy's own monthly advertising expenditures (thousands)
One of the outlets has the following conditions: P = 1.50, I = 10, T = 60, A₁ = 15, A; = 10
1. Estimate the number of cups served per week by this outlet. Also determine the outlet's
demand curve.
2. What would be the effect of a $5,000 increase in the competitor's advertising expenditure?
Illustrate the effect on the outlet's demand curve.
3. What would Joy's advertising expenditure have to be to counteract this effect?
The Compute Company store has been selling its special word processing software, Aceword, during
the last 10 months. Monthly sales and the price for Aceword are shown in the following table. Also
shown are the prices for a competitive software, Goodwrite, and estimates of monthly family income.
Calculate the appropriate elasticities, keeping in mind that you can calculate an elasticity measure
only when all other factors do not change (using Excel). For example, price elasticities, months
1-2.
Month
Price
Aceword
Quantity
Aceword
Family
Income
Price
Goodwrite
1
$120
200
$4,000
$130
21
120
210
4,000
145
3
120
220
4,200
145
4
110
240
4,200
145
90
5
115
230
4,200
145
6
115
215
4,200
125
10
7899
115
220
4,400
125
105
230
4,400
125
105
235
4,600
125
105
220
4,600
115
Gordon Dividend Growth Model
I downloaded some data about 3M (ticker MMM).
Company
3M
Ticker
MMM
Dividends Per Share
2017
$4.70
2018
$5.44
2019
$5.76
2020
$5.88
2021
$5.92
2022
$5.96
4. The dividend payment in 2022 was $5.96 per share.
Based on the five-year history, we see that dividends per share grew at a compound annual
growth rate of 4.86%
$5.96 (1/5)
CAGR =
$4.70
− 1 = (1.2681)0.20 − 1 = 1.0486 - 1 = 0.0486 = 4.86%
-
-
What should be the 2023 dividend based on these values?
Chapter 26 Solutions
Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
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