BUSINESS COLLEGE

Suppose Rita obtains 10 units of utility from the last dollar of income she receives and David obtains 6 units of utility from his last dollar of income. Assume both David and Rita have the same capacity to derive utility from income with identical marginal-utility-of-income-curves. Those who favor an equal distribution of income would____________.a. advocate redistributing income from David to Rita.b. advocate redistributing income from Rita to David.c. be content with this distribution of income between Rita and David.d. argue that any redistribution of income between them would increase total utility.

Answers

Answer 1
Answer:

Answer:

a. advocate redistributing income from David to Rita.

Explanation:

Since David is getting a lower utility from his last dollar obtained (6) than Rita (10), the benefit that David gains from this last dollar is less than what Rita would gain if she was the one receiving this dollar. Therefore, those who favor an equal distribution of income would advocate redistributing income from David to Rita, since total utility would increase with this redistribution.

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Cheap Money Bank offers your firm a discount interest loan at 8.25% for up to $25 million and, in addition, requires you to maintain a 15 percent compensating balance against the amount borrowed. What is the effective annual interest rate on this lending arrangement?
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Insurance.Susan,a trained nurse,was recently elected to the U.S.Senate.Susan is very concerned about the lack of insurance for many children and also working adults who cannot afford the insurance premiums.She proposes legislation that states are taxed sufficiently to provide health insurance coverage to children and that federal funds for state highways are denied to any state that does not also provide insurance coverage for uninsured adults.She also proposed that states with citizens earning higher than average incomes be taxed at a higher rate than other states.Bill,a senator,tells Susan that Congress lacks the authority to tax in this manner because the U.S.Constitution expressly reserves that right to the states.Ellen,another senator,tells Susan that Congress has no authority to link highway funds or any other funds with social welfare objectives.Sam,an administrative assistant,tells Susan that Congress is prohibited from taxing residents of one state at a higher rate than citizens of another state.Which of the following is true regarding Ellen's statement? A) Ellen is correct. B) Ellen is correct only if the state is making efforts to put social programs into effect and is not acting unreasonably in refusing to provide needed services. C) Ellen is partially correct in that Congress has no authority to link highway funds with social services,but any other funds may be linked to social services by executive order. D) Ellen is partially correct in that Congress has no authority to link highway funds with social services,but other funds may be linked to social services by an act of Congress. E) Ellen is incorrect.

Can someone plz help me really quick? I’m struggling. I can give brainliest points.

Answers

Pretty sure its the third one

Your best friend wants to borrow $2000 from you today for an emergency purchase they need to make that requires a cash payment. They promise to pay you back $1000 in 1 year (i.e. 12 months) and then pay you $1100 in two years (i.e. in 24 months). You would have to remove the money from your stock investment account which is earning on average a return of 5% (i.e. the effective yearly interest rate you are getting on your money is 0.05). Required:
a. Is this a fair deal for you? Justify your answer with an engineering economics analysis and discussion of the situation by calculating the Net Present Value (NPV) for the scenario.
b. Draw a Cash Flow Diagram for this situation.

Answers

Answer:

a. It is not a fair deal for me.

The question is how much is $1,000 today when received in 12 months' time from now.  The present value of $1,000 at 5% effective interest rate is $952 ($1,000 * 0.952).  The other repayment of $1,100 in 2 years' time from now is worth $997.70 today at the 5% effective interest rate.  This implies that my friend is repaying me $1,949.70 in present value terms.

For friendship sake, I may lend her the money, but in economic analysis terms, the NPV value will yield a negative value of $50.30 ($2,000 - $1,949.70).  My friend is not actually paying me back the amount I would lend to her.  She is paying me less than I actually would lend to her.

b. Cash Flow Diagram:

                 Year 1             Year 2

                    F1                F2

                 $1,000          $1,100     (Inflows)

Fo⇵.................⇵.......................⇵...........................⇵n period

Year 0

$2,000   (outflows)

Explanation:

The cash flow diagram for this loan is the graphical representation of the timing of the cash flows with a clear marking of the repayments made by my best friend in two instalments and the $2,000 that I lent to her.  This cash flow diagram presents the flow of cash as arrows on a timeline scaled to the magnitude of the cash flow, where outflows are down arrows and inflows are up arrows.

The Net present value (NPV) of this loan shows the difference between the present value of repayments by my best friend and the present value of $2,000 that I lent to her over a period of 2 years. To obtain this difference, the present values of cash inflows  of $1,000 in a year's time and $1,100 in two years' time are determined using the discount factor table based on the given interest rate of 5%.

Which of the following would you expect to decrease the demand for tennis racquets? A. A decrease in the price of tennis balls which are complements in consumption of tennis
B. An increase in the supply of tennis racquets
C. An increase in the price of tennis racquets
D. None of the above would decrease the demand for tennis racquets

Answers

Answer:

C) An increase in the price of tennis racquets

Explanation:

If tennis racquets become more expensive, the demand for them will decline, and people will try to supply this need with substitutes, for example, lacrosse raquets. The reason for this is that the classical supply and demand model tells us that demand and price are inversely correlated: if the price goes up, demand goes down, and viceversa.

Corporate governance Aa Aa The management of Badger Corp. controls 58% of the company's stock. The firm did not meet any of its quarterly sales projections for the last year. Some of the firm's institutional investors are worried that the firm's poor performance is partly because management has not been focused on maximizing shareholder wealth. Which of the following measures would the institutional investors most likely want to see implemented?O They would want to change the corporate bylaws so that one-third of the board seats are filled each year and each director serves a three-year term. O They would want to change the corporate charter to allow cumulative voting instead of noncumulative voting. O They would want to ensure that the company's CEO is also the chairperson of the board of directors.

Answers

Answer: They would want to change the corporate charter to allow cumulative voting instead of noncumulative voting.

Green Inc. made no adjusting entry for accrued and unpaid employee wages of $38,000 on December 31. This error would:__________. a. Understate assets by $38,000.
b. Overstate net income by $38,000.
c. Understate net income by $38,000.
d. Have no effect on net income.

Answers

Answer:

Net profit or net income is overstated by $38000 and option B is the correct answer.

Explanation:

The adjusting entry to be made for accrued and unpaid wages would have been,

Wages expense          38000 Dr

   Wages payable           38000 Cr

This entry would record an increase in expenses of $38000 and an increase in liabilities of $38000. As the entry is omitted, the expenses of $38000 are not recorded thus the expenses in income statement are understated. An understatement of expenses means an overstatement of profit by the same amount.

Thus, net profit or net income is overstated by $38000

You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs

Answers

Answer:

Explanation:

The comparison of psychological benefits to actual tangible costs depends on the individual in question. If the individual is constantly stressed to the point which the stress is affecting his/her health, work performance, mood, behavior around family, etc. then the tangible costs of going on vacation may be worth it. This is because a vacation would provide a moment of relaxation which would relieve all of that individual's stress and in doing so improve the individual's work performance, health, and overall quality of life. Therefore, the comparison between physical benefits to costs is always going to be a personal opinion.
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