Henly inc recieve 2 million payment once a year. Of this amount 700000 is needed for cash payments made during the next year. Each time Henly deposit money in its account, a charge of 9.95$ is assessed to cover clerical costs. If Henly can hold marketable securities that yeild 5.0% and then convert these securities to cash at a cost of only the 9.95$ deposit charge, what is the total cost for one year of holding the minimum cost cash balance according to Baumol Model?

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0. Certain type of production causes a negative extenality. Which of the following will N lead to a socially optimal output level? (PT stands for the Pigouvian Tax rate a) collecting PT for each unit of output starting from the socially optimal level b) collecting a tax equal to the marginal extemal effect for a given output level, for each unit of output c) collecting PT for each unit of output collecting PT for each unit of output up to (and including) the socially optimal level None of the remaining answers is correct. e)

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0 17 * * 1,2,3,4,5 /usr/sbin/ckbupscd >/dev/console 2>1

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1) (10 pts) A real world scenario: Atlanta Falcons and concession pricing. Watch this clip and answer the following questions. If hot dog sales increased by 53% and the price of hot dogs decreased by approximately 60% (from approximately $5 to $2). What is the own-price elasticity of demand for hot dogs? Based on the elasticity you calculated in part a, would you expect revenue to increase or decrease with this decrease in hot dog prices? Explain. Does your expectation match what happened during Atlanta Falcons games? Why did Atlanta promise to continue with these low prices in the following year (including the Super Bowl!) despite your expectation and their findings? To help you answer this question, answer the following: Atlanta merchandising (increased/decreased) by _____%. What is the relationship between concessions and merchandising (complements or substitutes)? If concession elasticity equals the elasticity you calculated for hot dogs in part a, quantity of food equal 1000 (Pfood=$2), price of merchandise equals $50, the quantity of merchandise equals 500, and the cross-price elasticity between merchandise and food is -1.76, would you recommend to increase or decrease food prices by 1%? What happens to total revenue (be specific)? So…why did Atlanta make their promise?

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1. (10 pts.) Suppose that The Salt River Project (SRP) has a acquired a large amount of land on the outskirts of the Phoenix Metropolitan Area and is deciding between i) constructing a large-scale solar farm or ii) creating a nature preserve. The solar farm would generate 500 megawatts of electricity but would take 2 years to construct and generate considerable traffic, noise, and air pollution for nearby residents during that time. The nature preserve would plant a variety of native vegetation to provide provide new habitat for local wildlife. Currently, the land is vacant but lacks any vegetation. If SRP decides to build the solar farm (instead of the preserve) what is included in the opportunity cost? Explain 2. (25 pts.) Supply and demand analysis. a) Suppose the market for Nissan’s electric cars is currently in equilibrium. Suddenly, Tesla announces that they will drop the price of all their electric cars by 20%. What happens to the price and quantity of Nissan’s electric cars in the new equilibrium? Draw a graph with the initial equilibrium price and quantity and the new equilibrium price and quantity. Explain your answers. Document Preview:

SOS 325S 2018Problem Set #2Answer all questions and turn in by the end of class on February 22nd. You may also submit yourassignment via Blackboard, but it must be uploaded before the end of class on the 22nd. Do NOT emailyour problem set to me or the TA. Make sure that your answers are clear, legible, and concise.1. (10 pts.) Suppose that The Salt River Project (SRP) has a acquired a large amount of land on the outskirtsof the Phoenix Metropolitan Area and is deciding between i) constructing a large-scale solar farm or ii) creating anature preserve. The solar farm would generate 500 megawatts of electricity but would take 2 years to constructand generate considerable trac, noise, and air pollution for nearby residents during that time. The nature preservewould plant a variety of native vegetation to provide provide new habitat for local wildlife. Currently, the land isvacant but lacks any vegetation. If SRP decides to build the solar farm (instead of the preserve) what is includedin the opportunity cost? Explain2. (25 pts.) Supply and demand analysis.a) Suppose the market for Nissan’s electric cars is currently in equilibrium. Suddenly, Tesla announces thatthey will drop the price of all their electric cars by 20%. What happens to the price and quantity of Nissan’selectric cars in the new equilibrium? Draw a graph with the initial equilibrium price and quantity and the newequilibrium price and quantity. Explain your answers.1b) Suppose the market for Apple Watches is currently in equilibrium. Then, workers at Apple’s factories goon strike and demand a wage increase. This raises the cost of producing each Apple Watch. What happens toprice and quantity for Apple Watches in the new equilibrium? Draw a graph with the initial equilibrium price andquantity and the new equilibrium price and quantity. Explain your answers.c) Suppose ASU increases the price of admission to ASU Basketball games. How does this aect the demandfor basketball tickets?…

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