The production function of john business is Q = L + 1.5K where Q is the variable capturing the quantity of output produced, L is the variable measuring the units of labour hired and K is the variable measuring units of capital hired. Suppose also that the wage rate per unit of labour is $20 and the rental rate per unit of capital is $24. Given this information, answer the following questions.
(i) In the long run, what is the input bundle that john should choose to produce 200 units of output? Show your working and explain your answer. What will be the associated minimum total cost of production?
(ii) Diagrammatically represent john's chosen input combination carefully using an isoquant and an isocost line while keeping labour (L) on the horizontal axis.
Answers
i) The total cost of production will be C is $51K.
(i) In the long run, John's input bundle that he should choose to produce 200 units of output is given by the formulae:
MPᵣₗ = w / pᵣₗ
MPᵣₖ = r / pᵣₖ
Where, MP = marginal product of labor or capital, w = wage rate per unit of labor, r = rental rate per unit of capital, pᵣₗ = price of labor, and pᵣₖ = price of capital.
Given the production function as Q = L + 1.5K
We know that
MPᵣₗ = ΔQ / ΔL = 1.
Therefore, 1 = w / pᵣₗ,
pᵣₗ = $20
Therefore, w = $20.
We also know that
MPᵣₖ = ΔQ / ΔK
MPᵣₖ = 1.5
Therefore, 1.5 = r / pᵣₖ, pᵣₖ = $24
Therefore, r = $36.
From the above formulae, John's input bundle would be:
MPᵣₗ / MPᵣₖ = w / r
MPᵣₗ / 1.5 = 20 / 36
MPᵣₗ = 0.5MPᵣₖ
Q = 200 = L + 1.5K
When Q = 200, L = 0.5(1.5K)
Therefore, the input bundle John should choose to produce 200 units of output is L = 0.5(1.5K) and K = K.
The total cost of production will be C = wL + rK, where w is the wage rate, L is the amount of labor and r is the rental rate.
When L = 0.5(1.5K) and Q = 200, then the cost of production will be minimum.
The total cost of production will be
C = wL + rK
C = $20 (0.5)(1.5K) + $36K
C = $15K + $36K = $51K
(ii) Diagrammatically represent John's chosen input combination carefully using an isoquant and an iso cost line while keeping labor (L) on the horizontal axis.
For the diagrammatic representation of John's chosen input combination, the isoquant and is cost line are required.
The isoquant is a curve that shows the various input combinations that can produce the same quantity of output.
An iso cost line is a line that shows the various combinations of labor and capital that can be purchased with a given budget.
John's chosen input combination will be at the point of tangency between the isoquant and iso cost line. To draw the diagram, the following steps will be taken:
1. Choose a level of output Q = 200 units
2. Set up the equation for the isoquant by equating it to Q and solving for K in terms of L, where
Q = L + 1.5K
K = (Q-L)/1.5
3. Draw a graph with the amount of labor, L, on the horizontal axis and the amount of capital, K, on the vertical axis.
4. Plot the isoquant by using different values of L to solve for K, then plot the resulting points on the graph.
5. Draw an iso cost line by calculating the cost of production for different levels of L and K.
6. The point of tangency between the isoquant and iso cost line will be the optimal input combination.
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Related Questions
Help me please please please
Answers
Answer:
1 ) $17.14
2) $41.8
3) $39.2
4) 12%
Explanation:
1-3) 100% is full. subtract the percent off by 100. For example #1 is 25%, we would 100% - 25% = 75%. then multiply the percentage by the price which is $22.85 x 0.75 = $17.14
same for the rest
4) use the formula
Discount = original price - selling price
$399 - $350 = $49
then use the formula
% = discount/original price multiply by 100%
$49/$399 which is 0.1228 then multiply it by 0.100 which is 12%
check your answer by 100 - 12 = 88 then 399*0.88 = 351.12
they round the price so it is $350
Magazines make most of their money from?
Answers
Answer:
advertisers
Explanation:
There are many Magazines that are published ion the market and becomes popular. Magazines make most of their money from advertiser.
Who is advertiser?An advertiser is the institution, administration, or any person that pays for an advertising attribute or time to demonstrate a convincing promotion or content to the public. Magazines make most of their money from by the means of advertiser.
Therefore, advertiser advertises the content to the public to publish any information.
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Which is a business owned and operated by a single individual?
Answers
Sole proprietorship is a business owned and operated by a single individual.
A sole proprietorship may operate under the owner's name or under a fictitious name, although laws regarding the use of fictitious names vary by state.
The use of fictitious names does not create a separate entity from the business owner. Sole proprietorships are popular due to ease of entry. When an individual starts a sole proprietorship, they own and control all aspects of the business.
Even if you hire employees, you are still personally responsible for full legal responsibility, which is a characteristic of sole proprietorships that distinguishes them from other forms of business.
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The manager of Party Maniac Gh. has received an analysis of several cities being considered for a new order fulfillment center (warehouse). The scores (scale is 100 points = best) are contained in the table below. The factors whose weights have not been indicated all have equal weight Location Factor Weight W X Y Z Business services 70 90 50 40 Community services 0.09 50 70 60 70 Real estate cost 70 30 80 60 Construction costs 0.20 80 60 60 50 Operating costs 50 40 70 60 Business taxes 60 90 60 40 Transportation costs 0.15 80 60 70 80 i. Rank the locations based on the maximum overall weighted score from the best to worst ii. If the manager is no more interested in business services and community services, and allocates equal weights to all the remaining five factors, how would the locations be ranked from best to worst?
Answers
Based on the maximum overall weighted score, the locations can be ranked from best to worst as follows:
1. Location Y: The maximum overall weighted score for Location Y is 70.79.
2. Location Z: The maximum overall weighted score for Location Z is 68.50.
3. Location X: The maximum overall weighted score for Location X is 68.20.
4. Location W: The maximum overall weighted score for Location W is 62.00.
ii. If the manager is no longer interested in business services and community services and allocates equal weights to the remaining five factors, the locations would be ranked from best to worst as follows:
1. Location Z: The overall weighted score for Location Z is 66.00.
2. Location X: The overall weighted score for Location X is 65.00.
3. Location Y: The overall weighted score for Location Y is 63.20.
4. Location W: The overall weighted score for Location W is 58.80.
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True or False: If Dmitri's Fire Engines were a competitive firm instead and $175,000 were the market price for an engine, decreasing its price from $175,000 to $150,000 would result in the same change in the production quantity and, thus, total revenue. True False
Answers
False. Decreasing the price from $175,000 to $150,000 would not result in the same change in the production quantity and total revenue for a competitive firm like Dmitri's Fire Engines.
In a perfectly competitive market, individual firms are price takers, meaning they have no control over the market price. The firm must accept the prevailing market price and adjust its production accordingly.
If Dmitri's Fire Engines were a competitive firm and the market price decreased from $175,000 to $150,000, the firm would face a lower price for its engines. As a result, the firm's demand curve would shift downward, indicating that consumers are willing to purchase fewer engines at the new lower price. To maximize its profit, the firm would adjust its production quantity in response to the change in price.
The change in production quantity would depend on the firm's cost structure and profit-maximizing behavior. The firm would evaluate whether it is still profitable to produce at the new lower price and adjust its output accordingly. The change in production quantity would affect the total revenue, which is the product of price and quantity sold. Therefore, the change in total revenue would not be the same as the price decrease but would depend on the specific response of the firm to the new market conditions.
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a business that has too little working capital can take what action?
Answers
A business with too little working capital can take several actions to improve its financial situation:
1. Increase sales: By boosting sales through marketing strategies or improving products, the business can generate more revenue and improve its working capital.
2. Reduce costs: Identifying areas for cost reduction and implementing cost-saving measures can help the business preserve its existing working capital.
3. Optimize inventory management: Efficiently managing inventory levels can help to minimize carrying costs and avoid tying up too much capital in inventory.
4. Collect receivables faster: Speeding up the collection of outstanding receivables can improve cash flow and increase working capital.
5. Negotiate better payment terms with suppliers: By negotiating longer payment terms or discounts, the business can reduce its working capital requirements.
6. Secure short-term financing: The business can consider obtaining a short-term loan or line of credit to provide a temporary boost to its working capital.
7. Sell underutilized assets: Selling assets that are not contributing to the company's profitability can free up cash and improve working capital.
By implementing one or more of these strategies, a business with too little working capital can take action to strengthen its financial position and support its ongoing operations.
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When you plan a presentation, how should you make sure you stay on track as you talk?
A. Make a list of general topics and points you want to cover.
B. Write out every word of the presentation on notecards.
C. Memorize every word of the presentation in your head.
D. Have the audience tell you what else you need to talk about.
Answers
Answer:
A make a list
Explanation:
Answer:
It's A. Make a list of general topics and points you want to cover.
Explanation: hope it helps ^w^
5. What is the definition of a want? O A. Something you would like to have but will be okay without it. B. Something that is required or very important. O C. Something you can have every other day. D D. None of the above.
Answers
Answer: A
Explanation:
:)
Answer:
A bc it is means to want sum
When writing a check...
Spell out the dollars and cents in the short box next to the $ symbol
Spell out the dollars and cents on the long line that ends in "Dollars"
Never sign the check
Sign on the line that says "Pay to the order of"
Always print your signature
Answers
- Spell out the dollars and cents in the short box next to the $ symbol
- Spell out the dollars and cents on the long line that ends in "Dollars"
- Sign on the line that says "Pay to the order of"
- Sign your name in cursive or as you normally do
- Make sure the amount written in words matches the numerical amount in the box
- Ensure the date is correct and current
- Write the name of the person or organization you are paying on the line that says "Pay to the order of"
- Include any optional memo or note on the memo line
- Keep a record of the check in your checkbook register or other tracking system.
The rise of nationalism is evident through all the following except
Multiple Choice
A. Increased domestic lending.
the election of President Trump.
B.WTO protests.
C. Brexit referendum.
D.strong protests to immigration.
Answers
Answer:
A. Increased domestic lending.
Explanation:
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A verb associating two nouns in a business rule translates to a(n) ____ in the data model. group of answer choices relationship constraint entity attribute
Answers
Answer: Relationship
Explanation:
Just-in-time strategies are difficult to implement because of __________.
Answers
Due to uncertainty, just-in-time techniques are challenging to implement.
Just-in-time (JIT) strategies are inventory management techniques that aim to reduce waste, minimize costs, and increase efficiency by producing and delivering goods just in time to meet customer demand. While JIT can provide numerous benefits, such as reducing inventory holding costs and increasing customer satisfaction, it can also be challenging to implement.
One of the main challenges in implementing JIT strategies is the uncertainty associated with demand and supply. The demand for a product can vary significantly over time, and a sudden increase in demand may result in stockouts if production cannot keep up. Similarly, unexpected supply chain disruptions, such as delays or quality issues, can impact production schedules and lead to delays in delivering products.
Furthermore, JIT strategies require precise coordination between suppliers, manufacturers, and distributors, which can be challenging to achieve. Communication and collaboration are critical for ensuring that the right products are produced at the right time, in the right quantity, and with the right quality. Any breakdown in communication can result in delays or stockouts, which can ultimately harm customer satisfaction.
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Valerie is going to purchase a new car. The car she wants has a list price of $32,495. Valerie is planning to make a down payment of $1,877. Furthermore, she plans to trade in her current car, which is a 2006 Hyundai Sonata in good condition. She will finance the rest of the cost by making monthly payments over five years. She can finance the cost at a rate of 8. 64%, compounded monthly. She will also have to pay 8. 23% sales tax, a $2,243 vehicle registration fee, and a $314 documentation fee. If the dealer gives Valerie 87. 5% of the trade-in price on her car, listed below, approximately how much will Valerie pay in total for her new car? (Round all dollar values to the nearest cent, and consider the trade-in to be a reduction in the amount paid. ).
Answers
Valerie will pay $ 35,899.87 as the total cost of financing for the purchase of the new car which includes 60 loan payments amounting to $ 2,698.57 and the total loan interest is $513.57
What is the total cost of financing?The actual money you borrow in addition to the interest that you will have to pay is called the total cost of financing.
In this case, the Auto price is given $32,495
\(\rm loan\,term = \, 60\,months\,(12\times5)\\\\Interest\,rate =8.64\%\\\\Down\,payment = \$1,877\\\\Trade\,in\,value = \$ 28,433 ($32,495\times87.5\%)\\\\\rm\, Sales\,tax = 8.23\%\\\\Title\,,registration\,and\,other\,fees = $ 2,557( \$2,243+ \$314)\\\\Monthly pay : $44.98\\\\\rm\,Total\,loan\,amount = $2,185\\\\\rm\,Sales\,tax = $334.30\\\\\rm\,Upfront Payment = $ 4,768.30\\\\\)
A total of 60 loan payments is equal to $2,698.57, the total loan interest is equal to $513.57, and the total cost (price, interest, taxes, fees ) is equal to $35,899.87
Thus, Valerie has to pay $35,899.87 as the total amount for the purchase of the car.
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Jorge's soccer team is having its annual fundraiser. The team hopes to earn at least three times as much as it did last year. Last year the team earned $87. What is the team's goal for this year?
Answers
Answer:
131usd is the aswer
Explanation:
87*3=131usd
Dalia Ramirez Anchondo deposits $ 200 into her savings annuity every paycheck. She gets paid weekly. The credit union will pay Dalia 4% compounded quarterly. What is the future value of Dalia in 4 years.
Help me!!!!
Answers
Answer: $41,418.96
Explanation:
There are four quarters in a year and the interest rate is a yearly rate that should be converted to a quarterly rate:
= 4% / 4
= 1%
Delia gets paid $200 a week. There are 12 weeks in a quarter so the quarterly contribution is:
= 200 * 12
= $2,400
The number of quarters she invests is:
= 4 * 4years
= 16 quarters
As this payment is constant, it is an annuity.
Value after 4 years will be:
= Annuity * Future value interest factor of annuity, 1%, 16 periods
= 2,400 * 17.2579
= $41,418.96
Who are you voting in this years election and why?
i am a democrat so i will NOT be voting for trump. :)
Answers
Answer:
I am voting for Donald Trump in this election
Explanation:
Here's the revenue and expenses for the month. Calculate whether Mia had a profit or loss.
MAY ACCOUNTS
CHECKING
$860.00
REVENUE
FIXED EXPENSES
VARIABLE EXPENSES
CARD PURCHASE
$300
SAVINGS
$1,006.68
DOG FOOD
CAT FOOD
PET TREATS
PET SUPPLIES
$3,650
$2,850
$1,650
$1,800
RENT
$2,000
SALARIES
$2,000
UTILITIES
$1,000
PRODUCT STOCK $4,000
TOTAL
$9,950
TOTAL
$9,000
TOTAL
$300
ENTER MIA'S TOTAL PROFIT/LOSS FOR THE MONTH IN THE BOX BELOW, THEN CLICK SUBMIT.
$
SUMIT
Answers
Answer:
Loss
Explanation:
Because she started with 860.00 then ended with 300
Answer:
350
Explanation:
I guessed
Making good decisions is what market research is all about. False True
Answers
Answer:
True
.............................................
Weeks after an automobile accident, a friend continues to have difficulty maintaining balance and coordinating movements. you should suspect that damage may have occurred to the?
Answers
If your friend is having difficulty maintaining balance and coordinating movements weeks after an automobile accident, it is possible that they have damage to their cerebellum.
The cerebellum is a part of the brain that is responsible for balance, coordination, and motor skills. If it is damaged, it can cause problems with these functions.
Other possible causes of balance and coordination problems after an accident include:
Head injury: A head injury can damage the brain in a number of ways, including damage to the cerebellum.Whiplash: Whiplash is a neck injury that can occur in a car accident when the head is suddenly and forcefully moved back and forth. Whiplash can cause damage to the neck muscles and ligaments, as well as the spinal cord.Peripheral nerve damage: The peripheral nerves are the nerves that run from the spinal cord to the rest of the body. Damage to these nerves can cause a variety of problems, including numbness, tingling, and weakness.If your friend is experiencing balance and coordination problems after an accident, it is important to see a doctor to get a diagnosis and treatment. Early diagnosis and treatment can help to improve the chances of a full recovery.
Here are some tips for helping your friend cope with balance and coordination problems:
Encourage them to stay active. Exercise can help to improve balance and coordination. Start with gentle exercises, such as walking or swimming, and gradually increase the intensity as your friend's condition improves.Provide them with support. If your friend is having difficulty walking or moving around, offer to help them. You can also help them with tasks that require balance and coordination, such as getting dressed or cooking.Be patient. It takes time to recover from balance and coordination problems. Be patient with your friend and offer them your support.With time and treatment, most people who experience balance and coordination problems after an accident make a full recovery.
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If your friend is having difficulty maintaining balance and coordinating movements weeks after an automobile accident, it is possible that they have damage to their cerebellum.
The cerebellum is a part of the brain that is responsible for balance, coordination, and motor skills. If it is damaged, it can cause problems with these functions.
Other possible causes of balance and coordination problems after an accident include:
Head injury: A head injury can damage the brain in a number of ways, including damage to the cerebellum.
Whiplash: Whiplash is a neck injury that can occur in a car accident when the head is suddenly and forcefully moved back and forth. Whiplash can cause damage to the neck muscles and ligaments, as well as the spinal cord.
Peripheral nerve damage: The peripheral nerves are the nerves that run from the spinal cord to the rest of the body. Damage to these nerves can cause a variety of problems, including numbness, tingling, and weakness.
If your friend is experiencing balance and coordination problems after an accident, it is important to see a doctor to get a diagnosis and treatment. Early diagnosis and treatment can help to improve the chances of a full recovery.
Here are some tips for helping your friend cope with balance and coordination problems:
Encourage them to stay active. Exercise can help to improve balance and coordination. Start with gentle exercises, such as walking or swimming, and gradually increase the intensity as your friend's condition improves.
Provide them with support. If your friend is having difficulty walking or moving around, offer to help them. You can also help them with tasks that require balance and coordination, such as getting dressed or cooking.
Be patient. It takes time to recover from balance and coordination problems. Be patient with your friend and offer them your support.
With time and treatment, most people who experience balance and coordination problems after an accident make a full recovery.
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When the central bank sells government bonds on the open market, which of the following will most likely increase?
(A) Bank reserves
(B) Price of bonds
(C) Money supply
(D) Nominal interest rates
(E) The required reserve ratio
Answers
When the central bank sells government bonds on the open market, the most likely increase will be in the price of bonds (option B).
By selling government bonds on the open market, the central bank aims to reduce the money supply in the economy. When the central bank sells bonds, it receives payment in the form of reserves from the commercial banks. This transaction reduces the amount of reserves available to the banks.
The increase in the price of bonds occurs as a result of the decrease in demand for bonds caused by the central bank's selling activity. When the central bank sells bonds, it increases the supply of bonds in the market, which, in turn, leads to a decrease in bond prices. This inverse relationship between bond prices and bond yields means that as bond prices increase, bond yields (interest rates) decrease.
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In organizational culture, people focus refers to _____. a. the degree to which the organization monitors and responds to changes in the external environment b. the degree to which management ’s decisions take into account the effect of outcomes on employees within the organization c. the degree to which rules, policies, and direct supervision are used to oversee and control employee behavior d. the degree to which employees are encouraged to be aggressive, innovative, and risk seeking
Answers
Answer:
b)the degree to which management 's decisions take into account the effect of outcomes on employees within the organization
Explanation:
Organizational culture can be reffered to as believe or values by those in charge of a particular organization, and as far as the employee are taking these culture into consideration, there will also be improvement and normality in the organization. It should be noted that organization culture brings a great functionality in team work.
It should be noted that how focused people are in the organization, means the which management 's decisions take into account the effect of outcomes on employees
Match each word with the phrase that best defines it.
service
a measure of how financially worthy a
person is to receive loans
credit score
the act of stealing and using someone
else's personal information
identity theft
a condition of financial failure
bankruptcy
a resource that is provided to meet
consumers' needs
Answers
Answer:
Credit score - A measure of how financially worthy a person is to receive loans .
Identity theft - the act of stealing and using someone else's personal information .
Bankruptcy - A condition of financial failure
Consumers' needs - A resource that is provided to meet .
Explanation:
The Credit score is described as the numerical expression which represents an individual's creditworthiness. This number is determined by the evaluation of past credit files of the person which makes him/her worthy or not worthy to seek loans from the bank.
Identity theft is a term employed for describing an illegal or fraudulent use of a person's identity or personal information for seeking financial or other advantages(obtaining credit, medical services, file taxes, etc.) associated with that person.
Bankruptcy is demonstrated as the term used for 'legal declaration or recognition of the condition of insolvency of an individual or financial organization.' In this situation, the person or organization fails to repay the debts.
Consumer needs are described as the resources(product or service) that the consumers require to meet a particular need. In economic terms, it is the customer's desire for a resource or good for a specific benefit or advantage. For example: a fan would help the consumer to eliminate the feeling of heat.
despite being a business executive and competitive athlete, jorge is often treated as helpless by people he encounters in his daily life because he is paraplegic and uses a wheelchair. jorge's disability is a(n)
Answers
Jorge is a paraplegic who competes in sports and is a corporate executive, but because he uses a wheelchair, people frequently treat him like he is weak. Jorge has a master status impairment.
What exactly does the statement "race is a master position" mean?The phrase "master status" was originally coined by Everett Hughes in 1945, specifically in connection to race, and it was conceptualized as a position that would normally dominate others in social circumstances. Since that time, race and other forms of collective social identity have influenced people's "life scripts" and elevated to significant status in their lives.
What possible effects can such a master status have on a person's personality?If a person has a sickness or disability that assumes a dominating status, they may come to see themselves only as their condition. They might develop a different personality as a result.
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are good oppurtunities always spotted quickly or they often left unrecognized ?
Answers
Answer:
often left unrecognised
Answer:
Spotted quickly
Explanation:
Which asset type would be most useful as part of an income investment
strategy?
Answers
The asset type that would most fit an income investment strategy is C. Real estate.
Investment in real estate can come in several forms such as:
Investments in selling houses Investments in commercial propertyInvestment in rental private propertyInvestments in commercial property and rental private property will lead to a person getting regular income when rent is paid so it would be part of an income investment strategy which calls for regular income.
In conclusion, income investment strategy would best be achieved with real estate.
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Answer:
C
Explanation:
real estate
What are personal loans?
Answers
Answer:
personal loan is a specific amount of money you can borrow from the bank, with a fixed interest rate and you pay it back within a predetermined amount of time.
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The marketing manager at a company producing laundry products sees great
long-term profits from selling to many consumers worldwide who care about
low prices. Which of the following tactics would best support this manager's
low-price strategy?
A. Develop products with more features than the competition offers
B. Design simple, inexpensive packaging
C. Offer a customer help line for advice in using the products
D. Work with retailers that specialize in speedy checkout and fast
delivery
Answers
The tactics that would best support this manager's low-price strategy is Designing simple, inexpensive packaging. Thus option B is correct.
What is the manager?A manager refers to a person who is responsible head of any project and helps in arranging the resources, checking the progress, and timely completion of it in order to achieve the vision and goal of the organization.
In order to cater to a large number of potential consumers the low pricing strategy is used where the manager focuses on simple and inexpensive designs which help in the affordability of consumers.
Therefore, option B is appropriate.
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When searching for a school that is a good match for you, which of the following is NOT important to consider.
Financial options
Other degrees offered
Your priorities
Your preferences
Answers
Answer:
Explanation:
C
Answer:
Your preferences
Explanation:
Your preferences is not a factor to consider when searching for a good school match. It is important to consider financial options, other degrees offered, and your priorities when searching for a good school match.
You are taking a $5000 loan. You will pay it back in four equal amounts, paid every 6 months starting 5 years from now. The interest rate is 12% compounded semiannually. Calculate: The effective interest rate The amount of each semiannual payment The total interest paid
Answers
Answer:
Following are the solution to the given point:
Explanation:
Calculating the value of the effective interest rate:
Formula:
\(\text{Effective interest rate} =\frac{\text{annual nominal rate of interest}}{\text{compound year}}\)
\(=\frac{12}{2} \\\\ =6\%\)
Calculating the value of Effective annual rate of interest:
\(=(1+ \text{The effective rate})^{\text{(compound number )}} -1\)
\(=(1+0.06)^2 -1\\\\=(1.06)^2 -1\\\\=1.1236-1\\\\=0.1236\\\\=12.36 \%\)
Calculating the Amount in each semiannual payment:
\(= 5000 \times (\frac{F}{P}, 6\% ,9) \times (\frac{A}{P}, 6\%,4)\\\\= 5000 \times 1.689479 \times 0.288591\\\\= 2437.85\)
Calculating the value of the total interest paid:
\(= 2437.85 \times 4 - 5000\\\\= 9751.40-5000\\\\ = 4751.40\)
As a factor of production, what is capital?
A. an industrial good
B. the natural resources used to create a product
C. the entrepreneur who sees how to make something useful
D. the tangible products made by labor
Answers
Answer:
Option "D" is the correct answer.
Explanation:
Labor produces tangible goods, which are referred to as capital. There are production-related man-made items such as machinery, vehicles, and chemicals. That is what sets them apart from commercial products.