if the price of a good increase and the good is a normal good the budget constraint will pivot inward and consumption of the good should decrease true false
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- Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.A building contains 1000 lightbulbs. Each bulb lastsat most five months. The company maintaining thebuilding is trying to decide whether it is worthwhileto practice a “group replacement” policy. Under agroup replacement policy, all bulbs are replaced everyT months (where T is to be determined). Also, bulbsare replaced when they burn out. Assume that it costs$0.05 to replace each bulb during a group replacementand $0.20 to replace each burned-out bulb if it isreplaced individually. How would you use simulationto determine whether a group replacement policy isworthwhile?Suppose the amount of steel was decreased by D units.What is the impact on the optimum objective value?How large can the increase in steel availability be sothat the shadow price remains as 228 4/7 (1,600/7)?Suppose that steel becomes available at $545 perthousand pounds. Should you purchase the steel? Suppose that you could purchase a thousand pounds ofsteel for $205. Should you purchase the steel?
- You are thinking of starting Peaco, which will produce Peakbabies, a product that competes with Ty’s Beanie Babies. In year 0 (right now), you will incur costs of $4 million to build a plant. In year 1, you expect to sell 80,000 Peakbabies for a unit price of $25. The price of $25 will remain unchanged through years 1 to 5. Unit sales are expected to grow by thesame percentage (g) each year. During years 1 to 5, Peaco incurs two types of costs: variable costs and SG&A (selling, general, and administrative) costs. Each year, variable costs equal half of revenue. During year 1, SG&A costs equal 40% of revenue. This percentage is assumed to drop 2% per year, so during year 2, SG&A costs will equal 38% of revenue, and so on. Peaco’s goal is to have profits for years 0 to 5 sum to 0 (ignoring the time value of money). This will ensure that the $4 million investment in year 0 ispaid back by the end of year 5. What annual percent ge growth rate g does Peaco require to pay back the…As the Quality Sweaters problem is now modeled, if all inputs remain fixed except for the number mailed, profit will increase indefinitely as the number mailed increases. This hardly seems realistic—the company could becomeinfinitely rich. Discuss realistic ways to modify the model so that this unrealistic behavior is eliminated.Rina consumes orange and avocado. In year 2020, orange cost $4 each, avocado cost $5 each. In year 2021, orange cost $6 , avocado cost $8. She buys 5 oranges and 4 avocados. a. Compute a consumer price index for oranges dan avocados for each year. Assume that year 2020 is the base year in which the consumer basket is fixed. How does your index change from 2020 to year 2021? b. Compute Rina’s nominal spending on oranges and avocados in each year. How does it change from 2020 to 2021?
- Which of the following is NOT a determinant of the demand for good X?I need a detailed explanation on how to solve this problem: A bagel shop buys each bagel for $0.08 and sells each bagel for $0.35. Leftover bagels at the end of the day are purchased by a local soup kitchen for $0.03 per bagel. The shop’s owner has observed for the daily demand, Q, the following probabilities, f(Q): Q 0 5 10 15 20 25 30 35 f(Q) 0.05 0.10 0.10 0.20 0.25 0.15 0.10 0.05 - What is the optimal daily order in multiples of 5 (include the model name and formula)? - If the daily demand is normally distributed (the mean and variance can be obtained from the table above), then what is the optimal daily order?I own a single share of Wivco stock. I must sell myshare at the beginning of one of the next 30 days. Each day,the price of the stock changes. With probability q(x), theprice tomorrow will increase by x% over today’s stock price(x can be negative). For example, with probability q(5),tomorrow’s stock price will be 5% higher than today’s. Showhow dynamic programming can be used to determine astrategy that maximizes the expected revenue earned fromselling the share of Wivco stock. Assume that at thebeginning of the first day, the stock sells for $10 per share.
- AutoTime, a manufacturer of electronic digital timers, has a monthly fixed cost of $50,000 and a production cost of $7 for each timer manufactured. The timers sell for $15 each. (a) What is the cost function C(x)?C(x) = (b) What is the revenue function R(x)?R(x) = (c) What is the profit function P(x)?P(x) = (d) Compute the profit (loss) corresponding to production levels of 3000, 6000, and 11,000 timers, respectively. (Input a negative value to indicate a loss.) 3000 timers $ 6000 timers $ 11,000 timers $Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are 11 % and 14 %, respectively. The beta of A is 0.8 % while that of B is 1.5. The T-bill is currently 6 %, while the expected rate of return of the S&P 500 index is 12 %. The standard deviation of portfolio A is 10 % annually, while that of B is 31 % , and that of the index is 20 %: If you currently hold a market index portfolio, would you choose to add either of these portfolios to your holdings? Explain. If instead you could invest only in bills and one of these portfolios, which would you choose, and why? Investor Y, who put K1 in large stocks (the S & P 500 portfolio) on December 31, 1925, and re-invested all dividends in that portfolio, would have ended on December 31, 2003, with K1992.80.4. A publisher prints copies of a popular weekly tabloid for distribution and sale. The fixed costs are $500 per print run, with each copy printed costing an additional $0.40. If C(q) is the cost function (in $) of the price of the print run as a function of copies printed, what is the formula for C(q)? Select one: a. C(q) = 500 + 0.4q b. C(q) = 500q + 0.4 c. C(q) = (500 + 0.4)q d. C(q) = 500 - 0.4q e. C(q) = 500q - 0.4 5. A hot dog vendor sells an average of 50 hot dogs during a Little League baseball game. If the sales are Normally distributed with a standard deviation of 7 hot dogs, what is the probability the vendor will sell between 45 and 65 hot dogs? Select one: a. 74.50% b. 92.36% c. 99.78% d. 174.50% e. 2.14 f. -0.71 g. 0.71