3) Explain carefully the Keynesian theory of money demand. Then discuss the critiques made by Friedman to the Keynesian theory of money demand. 4) Derive carefully the IS curve and discuss the determinants of its slope and its position.
3 Give an example of a positive and negative externality and what regulations the government would use to correct the negative externality?
3. Examine the proof of Bessel’s inequality and show that equality holds if the Fourier series of ϕ converges to ϕ uniformly. This is known as Parseval’s equality. Apply Par- seval’s equality to the Fourier series in Example 6.4.3 to derive the summation identity
∞
1 π4
n=1
n4 = 90 .
3 Despite finding that the boy was partly responsible for his own injuries the primary judge decided the driver should bear total responsibility (blame). What reason did the primary judge give for coming to this conclusion? [3 marks]
4 In the appeal the Court did not consider whether the actions of either the driver orthe boy had broken any statutory rule of the road. Explain why the question of whether any road rule had been broken was not relevant to the legal issue the Court of Appeal was deciding. [2 marks]
5 The Court of Appeal took a different view from that of the primary judge (as described in question 3) and said the boy must bear at least some blame. On the basis of what facts did the Court of Appeal come to this conclusion? [2 marks]
30,000 in fixe
3. Metro Airlines runs 10 flights per day at a total cost of $50,000, which includes $30,000 in fixed costs for airport fees, airplanes, and the reservation system and $20,000 invariable costs for flight crews, fuel, baggage handlers, and food service. If an 11th flight would have 25 passengers, each paying $100, would it make economic sense to offer the flight? If a 12th flight only drew 15 passengers, would it make sense to offer it? Discuss and show your math.
4. Critical Thinking: Although still not yet fully implemented Congress passed a bill creating national health care system, called
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3. Metro Airlines runs 10 flights per day at a total cost of $50,000, which includes $30,000 in fixed costs for airport fees, airplanes, and the reservation system and $20,000 invariable costs for flight crews, fuel, baggage handlers, and food service. If an 11th flight would have 25 passengers, each paying $100, would it make economic sense to offer the flight? If a 12th flight only drew 15 passengers, would it make sense to offer it? Discuss and show your math
3.Suppose there are two firms that sell slightly different formulations of a perfectly safe sugar substitute. You are the manager of one such firm that produces a product called Ultrasweet. Your competitor produces a product called Sweet and Healthy. Discuss the direct effects of a reduction in the price of Sweet and Healthy, your competitor’s product, on a typical consumer’s consumption of Ultrasweet. Assume the consumer considers them both normal goods and that they are reasonably close substitutes since they are usually blended into other products like coffee or ice cream. Include in your discussion an assessment of the substitution effect and the income effect on Ultrasweet consumer quantity demanded. Suppose both firms have a ½ price sale. Discuss the direct effects of the price cuts on a typical consumer’s consumption of Ultrasweet. Answer this question in you discussion: Which effect is unchanged in this situation, the substitution effect or the income effect?
3.
Who was the father of Punched Card Processing?
A.J Presper EckertB.Charles BabbageC.Dr. Herman HollerithD.Blaise PascalE.None of the aboveView Answer Workspace Report Discuss in Forum
3. Suppose the portfolio of a large institutional investor ‘Animal has a beta of 1.25, and the standard deviation of the rate of return on its portfolio is 15 percent and its expected rate of return is 15 percent. The portfolio of another institutional investor Beast’ has a beta of 0.75. The market portfolio may be expressed as a portfolio comprising the portfolios of Animal and Beast. Suppose there is a firm called Cunning corporation’, whose stock’s beta is 2 and it can borrow at the risk free rate, which is 2.5 percent. Cunning’s equity value is £1.5 million and its debt is £1 million. The present value of Cunning’s tax shield is £0.3 million. Assuming that both CAPM and the Modigliani-Miller theorem with corporate taxes hold, answer the following questions. a) What is the expected return on the market portfolio? [5 marks] b) What is the standard deviation of the rate of return on Beast’s portfolio? [5 marks] c) What is the weight attached to Beast if we express the market portfolio as a portfolio [5 marks] [5 marks] Total 20 marks] comprising the portfolios of Animal and Beast? d) What is the after-tax WACC of Cunning? 2. A firm ‘Kappa Industries’ is a very young business, which is growing rapidly and to which intangible assets are very important. In contrast, another firm ‘Gorgeous Food’, whose business is profitable and stable, but has limited growth opportunities and most of its assets are tangible. With this setup, answer the following questions. a) Assuming that the predictions of the pecking order theory hold, which firm should have [20 marks] b) Assuming that the predictions of the trade-off theory hold, which firm should have a [20 marks] a higher payout ratio? Explain concisely why. higher debt-equity ratio? Explain concisely why.
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3.Which of the following cannot be used as a mount option in /etc/fstab?A.RwB.NoexecC.NdevD.Defaults
3. Using the IS-LM graphs, show that a decrease in government spending will cause output and interest rates to fall. 4. Using the IS-LM graphs, show what will happen to output and the interest rates if there is a balanced budget increase in spending—that is higher spending financed by higher taxes. 5. Using IS-LM graphs, predict what will happen to output and the interest rate if the central bank reduces the money supply.
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