Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 42, Problem 13DQ
To determine
Micro credit, conditional transfers and unconditional transfers.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose that you own a 10-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. If the price at which wheat can be sold is $5 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 10 acres? What if the price of wheat rose to $6 per bushel?
Joanne has just completed high school and is trying to determine whether to go to communtiy college for two years or go directly to work. Her objective is to maximize the savings she will have in the bank five years from now.
If she goes directly to work, she will earn $18,500 per year for each of the next five years. If she goes to community college, for each of the next two years she will earn nothing—indeed, she will have to borrow $6,000 each year to cover tuition and books. This loan must be repaid in full three years after graduation. If she graduates from community college, in each of the subsequent three years, her wages will be $35,000 per year. Joanne’s total living expenses and taxes, excluding tuition and books, equal $15,000 per year.
Joanne should go to (Click to select) work junior college , since the total value of Joanne's savings would be $__ if she goes directly to work and $__ if she goes to community college.
3. Suppose that individuals with a strong enthusiasm for technology are willing to pay $500 now for the latest iPhone, but only $350 if they must wait a year. Normal people are willing to pay $250, and their desire to purchase does not vary with time. Assume for simplicity that there are equal numbers of each customer type (strong enthusiasm and normal), that the MC of the iPhone is $100, ignore the time value of money, and there are only two years. (Hint: With discrete problems consider all the different options and evaluate each of them to determine the optimal strategy. In this case, there are only three prices given and two time periods, so a total of 6 pricing strategies exist but some of them will.)
What is the highest profit level that can be achieved if the price for an iPhone is fixed for both years (uniform pricing)?
What is the highest profit level that can be achieved if the price for an iPhone can be altered across the two years?
Chapter 42 Solutions
Economics (Irwin Economics)
Knowledge Booster
Similar questions
- KATHY BUYS A TELEVISION SET FROM A MERCHANT WHO ASKS P1,500.00 AT THE END OF 60 DAYS (CASH IN 60 DAYS). KATHY WISHES TO PAY IMMEDIATELY AND THE MERCHANT OFFERS TO COMPUTE THE CASH PRICE ON THE ASSUMPTION THAT MONEY IS WORTH 8% SIMPLE INTEREST. WHAT IS THE CASH PRICE TODAY? O a. P1,480.26 O b. P1,408.26 O c. P1,048.26 O d. P1,840.26arrow_forwardSuppose you are moving into a new apartment that you expect to rent for five years. The owner of the apartment offers to provide you with a used refrigerator for free and promises to maintain and repair the refrigerator during the next five years. You also have the option of buying a new energy- efficient refrigerator (with a five-year free maintenance agreement) for $600. The new refrigerator will reduce your electric bill by $150 per year and will have a market value of $50 after five years. The interest rate is 12%. Use the preceding information to calculate the present value of the cost saving and resale value of the refrigerator. Then decide if the investment is worthwhile, given the present value of the cost of the refrigerator. At this interest rate, the present value of cost saving and resale value of the new refrigerator is about present value of the cost of the refrigerator. Thus, you should choose the refrigerator. which is than thearrow_forwardThe accompanying table shows Francesca's estimated annual benefits of holding different amounts of money. Average money holdings $ 700 800 900 How much money will Francesca hold if the nominal interest rate is 6 percent? (Assume she wants her money holdings to be in multiples of $100.) Multiple Choice O O 1,000 1,100 O C $1,000 $900 $800 Total benefit $50 59 66 71 74 $700arrow_forward
- B A 800 1,300 1,800 WEALTH (Dollars) Refer to Figure 27-3. From the appearance of the graph, we know that Dexter's level of satisfaction increases by the same amount when his wealth increases from $1,001 to $1,002 as it does when his wealth increases from $1,000 to $1,001. Dexter's level of satisfaction increases by less when his wealth increases from $1,001 to $1,002 than it does when his wealth increases from $1,000 to $1,001. Dexter's level of satisfaction increases by more when his wealth increases from S1,001 to S1,002 than it does when his wealth increases from $1,000 to $1,001. the change in Dexter's level of satisfaction is constant as wealth increases. UTILITYarrow_forwardВ.2 (1). Mr. Majid is a wholesaler in Mutrah market. The main items he sell in the Seeb market are Wheat, Rice and Sugar. Jasim LLC is a retailer in Barka who buys wheat, rice and sugar from Majid, in whole sale since ten years for the retail shop. As they are in a very good trade relationship Majid planned to give him a trade discount of 20%, 25% and 30% on wheat, rice and sugar respectively. If Jasim LLC, gets such a discount from Majid , they will be able to sell the items in the below mentioned list prices: Items Total list price Wheat ( 500 kg) OMR 899.50 Rice ( 1000 kg ) OMR 1002.90 Sugar ( 900 kg) | OMR 999.50 You are required to: (a) What price Jasim LLC should pay to buy the Wheat to Mr. Majd, the wholesaler? (b) What price Jasim LLC should pay to buy the Rice to Mr. Majid, the wholesaler? (c) What price Jasim LLC should pay to buy the Sugar to Mr. Majid, the wholesaler?arrow_forward10. If an individual takes out a $300,000 mortgage from the bank and the loan agreement stipulates that the interest rate on the loan is 15%. How much does the borrower needs to pay? * O $300,000 O $315,000 O $340,000 O $345,000arrow_forward
- 10) GE Fridges Some GE refrigerators have ice and water dispensers that won't dispense ice or water unless your filter authenticates as an official component produced by GE. Suppose one popular model costs $800 to produce, and each filter costs just $10 to produce. Suppose further that GE has categorized their consumers into two groups: low-volume users, who buy two filters per year and value the water and ice dispensing fridge at $1000, and high-volume users, who buy six filters per year and value the water and ice dispensing fridge at $1200. GE is considering two pricing strategies: ● Pricing strategy 1: $980 for refrigerator & $10 for filters Pricing strategy 2: $940 for refrigerator & $25 for filters a) Which pricing strategy would GE prefer? b) Based on the information in the question, I want you to come up with a better pricing strategy than what's been proposed. Specifically, what's the optimal price for the refrigerator and the optimal price for filters that will maximize…arrow_forwardQUESTION 19 You lend your sister's daughter $2,000 for a year, if at the end of the year she pays you $2,180. The interest rate you are charging her is O 1.1%. O 9%. O 10%. O 20%.arrow_forwardSuppose that interest payments are $150 per year on a $2,000 loan and $1200 her year on an $15,000 loan. The interest rates on the two loans are Multiple Choice 8 percent on both loans. 7.5 percent and 8 percent, respectively. 8 percent and 7.5 percent, respectively. 13.3 percent and 12.5 percent, respectively.arrow_forward
- Helena earns $2000 this year and will earn $1500 the next year. The interest rate between each year is 10%. She wants to consume the same quantity each year. She wants to have spent all her money by the end of year 2. Warning: each question does build on each other How much would she save? How much would she consume? If she wins the lottery during the first year, raising her earnings to $10000 this year, how much would she save, how much would she consume? If she now wants to consume twice as much in year 1 as she does in year 2, how much would she save, how much would she consume? If she now has no preferences about her consumption, but she wants to save $5000 in year 1 (to buy a new car in year 2), how much would she consume in year 1 and year2?arrow_forwardAnna spends Php400,000 per year on painting supplies and storage space. She recently received two (2) job offers from a famous marketing firm – one offer was Php150,000 per year and the other was Php100,000 per year. However, she turned both jobs down to continue a painting career. If Ann sells 45 painting per year at a price of Php10,000 each: What are her economic profits?arrow_forwardThe market interest rate is 9 percent and is expected to stay at that level. Consumers can borrow and lend all they want at this rate. Consider each of the following situations. 1) Would you prefer a $500 gift today or a $540 gift next year? 2) Would you prefer a $100 gift now or a $500 loan without interest for four years? 3) Would you prefer a $350 rebate on an $8000 car or one year of financing for the full price of the car at 0 percent interest?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education