3 Only questions 3 and 4Consider an industry that owns 50 tons ofcopper to be used for communicationsapplications over two periods, years 0 and 1.Assume that the cost of extraction is zero. Theannual discount rate is 5 percent. The annualstationary demand curve for the copper is Q =200 – ½ P, where Q is in tons and P is in dollarsper ton.1. How much copper would an efficient industryextract in years 0 and 1?2. What would the equilibrium price be in eachyear?3. Suppose the discount rate is 10 percent ratherthan 5 percent. How does that change theanswer?4. Suppose fiber optics, a perfect substitutecopper, will become available at the beginningof year 1. The price of the fiber optic material willeffectively be zero. How much copper would theefficient industry allocate to periods 0 and 1?

Demand function : Q = 200 - 0.5P P = 400 - 2Q Optimal production level is achieved at the point…

Answered: Only questions 3 and 4 Consider an…

Only questions 3 and 4 Consider an industry that owns 50 tons of copper to be used for communications applications over two periods, years 0 and

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.5P

See similar textbooks

Related questions

Q: Given that the firm's TFC=$10, complete the following table: (Note: you must show your calculations…

A: Total cost is a sum of fixed cost and variable cost. Fixed cost is constant and does not depend on…

Q: Problem #1 Below is the demand schedule for rice during the month of January 2021. Create the demand…

A: Given Point Price Quantity demanded A 123.5 11 B 114.5 17 C 98.0 28 D 87.5 35 E 75.5…

Q: How do we decide the amount we buy on the indifference curve? MU1/P1 = MU2/P2 %3D MU1/P1 = P2 MU1/P2…

A: Indifference curve shows the combinations of goods that give consumer the same level of…

Q: 3. What are the effects of the following events on the monetary base? i. The Treasury writes checks…

A: The monetary base is defined as currency in circulation along with bank reserves.

Q: The new generator, which has an initial cost of S80,000, has annual operating costs of $15,000 over…

A: The yearly cost of owning, operating, and maintaining an asset over the course of its full life is…

Q: a.Big Brew maintains a low price and Little Kona enters. b.Brew maintains a low price and Little…

A: The correct answer is given in the second step.

Q: Question 5. (k. function: M/P = L (r, Y-T), where r is the interest rate and (Y-T) is the disposable…

Q: 1. A furniture store sold picnic chair for $22.95 during a promotional sale. The store bought the…

A: Cost of coffee maker = $36 less 40% and 15% Now the actual cost = 85% of (60% of 36) = $18.36…

Q: As the manager at a local florist, you supervise two employees, Anita and Jerome. There are two…

A: Part-a) In terms of floral arrangements, Jerome has a comparative advantage. Jerome is a low-cost…

Q: Briefly explain the free rider problem with respect to the funding of local public schools. How does…

A: Answer given below,

Q: Predictions using the supply-and-demand model for electronic games are likely O A. not reliable…

A: “Since you have asked multiple questions, having multiple parts we will solve the first three…

Q: 2 Which is more economical, a tile floor or a wood floor? Assume that the public building has a life…

Q: Suppose a firm produces according to the production function Q=3K/3L/3 and faces a wage rate of $5…

A: The Production function Q = 3K1/3L1/3 Wage rate(w) = $5 Rental rate of capital(r) = $2 Output price…

Q: Find the capitalized cost of a present cost of $300,000, annual costs of $35,000 for more than 50…

A: Given present cost = 300000 $ Annual cost = 35000 $ Interest rate = 12 %

Q: Question 5. aSuppose a small open economy has the following money demand function: M/P =L (r, Y-T),…

A: The equilibrium in the money market is achieved where the money demand and money supply are equal to…

Q: 1. Match the description to the type of tax, v Tax on the use of vehicles, gasoline, alcohol,…

A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…

Q: 1. Restructuring a. is the change in the structure of output. b. substitution of machinery for…

A: Restructuring is a sort of corporate activity that entails dramatically altering a company's debt,…

Q: Over the past year (from 1 year ago to today), the inflation rate was 4.31%, the risk-free rate was…

A: The correct answer is given in the second step.

Q: If a firm in a perfectly competitive market faces an equilibrium price of $5, its marginal revenue…

A: In a perfectly competitive market, A firm price is equal to the marginal cost (P=MC) and marginal…

Q: A cannabis business operates as follows. Let X, be the amount of cannabis in its inventory on the…

A: Introduction Here Xn be the amount of cannabis of its inventory on the last day of month. He has…

Q: Suppose that there are two large economies in the world, country A (the foreign country) and country…

A: Solution:- 6) In Country A, technological innovation lowers the cost of manufacturing, resulting in…

Q: When countries specialize in producing goods for which they have a comparative advantage and then…

A: When countries specialize in produncing goods for which they have comparative advantage and then…

Q: The graph below shows the Lorenz curves of two different countries stylistically called ‘red’ and…

A: The Gini index, often known as the Gini coefficient, measures income distribution throughout a…

Q: hand written asap

A: The utility is the level of satisfaction that a consumer gets by consuming the units of a commodity.…

Q: Question 3 of 50 Making a profit is usually not important to businesses in a mixed market economy. O…

A: A mixed economic system includes both capitalism and socialism.A mixed economic system preserves…

Q: Question # 14: Economic “Sustainability" and Environmental “Impact" Analysis : A country of 150…

A: The environmental impact is calculated using the formula I = PAT

Q: B. Determine the inflation rate of Country ABC using its CPI from 2020 and 2021. Price Price Price…

A: Note: It is not possible to determine CPI because the required data (quantity) is not given. So…

Q: A lobbyist in our nation’s capitol must buy 250 votes in the House of Representatives and Senate to…

A: Lobbying, persuasion, or interest representation is the act of lawfully attempting to influence the…

Q: Use the macroeconomic policy objectives as a starting point: economic growth and increasing…

A: Inflation and employment are directly related to each other. With higher inflation there always…

Q: In the short run, a perfectly competitive firm's economic profits Question 7 options: must be…

A: In perfect competition there are large number of firms selling identical goods.

Q: Assume this data represents an economy only pródučing economy wants to shift its production of these…

A: Given the production possibilities frontier of two goods : Computers and Leather jackets Therefore…

Q: Within a monopolistically competitive industry Question 14 options: firms can freely enter and…

A: In a monopolistic competition, there are many firms and buyers. Firms sell differentiated goods…

Q: Problem #2 Suppose the Demand schedule of Rice was been revised during February 2021. Graph the…

A: The demand function depicts the connection between the amount of an item sought and the variables…

Q: A farmer sells $150,000 of apples to individuals who take them home to eat and $75,000 of apples to…

A: A farmer is selling the apples to two individuals one is final consumer and one is the producer.

Q: Financial intermediaries are firms that: match buyers and sellers of bonds. conduct open market…

A: Financial intermediaries are a bridge between savers and borrowers.

Q: Figure above shows statistics on Real GDP in Qatar ($billions) from 2012 to 2020, in addition to…

A: Answers given below,

Q: The owner of a cemetery plans to offer a perpetual care service for grave sites. The owner estimates…

A: The correct answer is given in the second step.

Q: Problem #2 Suppose the Demand schedule of Rice was been revised during February 2021. Graph the…

A: We plot both the demand schedules and see a leftward shift in demand curve in February.…

Q: Question 6 of 50 In which political system is the means of production controlled but not necessarily…

A: There are various political and economic systems which determine the ownership and control of…

Q: For a profit-maximizing price-taker firm, a reduction in the price of a good will cause the marginal…

A: Price taker firm refers to the firm which accepts the price existing in the market. Both the buyers…

Q: Direction: Complete the table below to find the 60th percentile for the following s of data. Find…

A: Given: Data set 1 Data set 2 Data set 3 20 49 18 22 50 19 25 55 20 32 55 22 35 60 25…

Q: Why does perfect competitive market need to be maintained?

A: In an economy, a perfectly competitive market is the place where anyone is allowed to enter or exit…

Q: Suppose that the unemployment rate has increased by 2%. What would be the change in the output gap?…

A: Gross Domestic Product refers to the sum of all the values of the goods and services that people…

Q: If a bushel of wheat costs $10 in the United States and 5 pounds in the United Kingdom, the long-run…

A: 1. The answer is - A. 2 pounds per dollar

Q: Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax…

A: In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate…

Q: B. Bank of Canada Banking System Assets Assets Securities Advances to Banks 36.0 16.0 Reserves…

A: Banks are often a significant part of our life when you stop to think about it. We go to the bank to…

Q: For a perfectly competitive firm, profit maximization occurs when output is such that O A) marginal…

A: In a perfect competition the firms are price takers. At the same price the firm can sell as many…

Q: Consider the following strategic interaction between two players, Player 1 (P1) and Player 2 (P2).…

Q: Capitalism refers to: a traditional economy. O a command economy. O a market economy. O socialism. C…

A: Capitalism is one ideology to run an economy that promotes the trade between the consumers and…

Q: Consider the market for ice cream cones. Suppose that supply in this market is given by PS =QS and…

A: "Since you have posted a question with multiple sub parts .We will solve first three subpart for…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

In the Southern Company Managerial Challenge, which alternative for complying with the Clean Air Act creates the greatest real option value? How exactly does that alternative save money? Why? Explain why installing a scrubber burns this option.
There exists 3000 tons of a non-renewable resource (q). Demand is given by P=800−0.25q where P is price. Marginal cost is constant and equal to 200. Assume there are two choices: either to mine the resource today (period 0) or in the next period (period 1). Assume a discount rate of 3%.For each question state: 1.How much will be mined in period 0 and 1, respectively? 2.What is the increase in price in percent between the periods?
Suppose a firm is facing a two-period (t = 0, 1) depletable resource (e.g., oil) extraction problem. The inverse demand function of the resource is Pt=20–0.5Qt ; marginal extraction cost is MCt = $5/unit; resource stock is Q = 20 units and interest rate is r = 50%. a) Write down the firm’s objective and efficiency condition. Using diagrams for this problem, calculate the dynamically efficient extractions, marginal user costs, present value of scarcity rents, and present value of total net benefits for the two periods.
If the spot price of gold is $250 per ounce and the risk-free rate of interest is 10 percent per annum, the six-month forward price per ounce of gold, in equilibrium, should be closest to A. $250.00. B. $256.25. C. $262.50. D. $275.00.
Consider C-grade bonds with average cumulative default rate 19.1 for year 5 and 22.53 for year 6. For these bonds, what is the 1-year hazard rate for the 6th year?
A university spent $1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kw, have a life expectancy of 20 years and suppose the discount rate is 10%. If electricity can be purchased for costs of$0.10 per kwh, how many hours per year will the solar panels have to operate to make this project break even? If efficient systems operate for 2,400 hours per year, would the project break even? The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?
If f(k) = 6k0.5, s = 0.1, n = 0.1, and d = 0.2, what is the value of f(k) at equilibrium? A. 6 B. 12 C. 18 D. 24
Address the following: a) Suppose that the allocation of a natural resource during three years results in a stream of total surplus value of $100 per period t (i.e.: t = 0; 1; 2). Obtain the present value of this stream when the discount rate is r = 0.10 and also when it is r = 0.05. b) Alternatively, the resource could be fully extracted now (say, in the period t = 0), resulting in a total surplus $280 at t = 0 and 0 in every future period. Is this immediate extraction strategy preferred to the extraction strategy described in (a) when r = 0.10? What about when r = 0.05? What does this tell us about the intuitive meaning of discounting regarding intertemporal preferences c) Explain what it means that a resource allocation is dynamically efficient
Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve between two periods in a dynamically efficient manner. What should be a maximum amount of Q so that the entire oil reserve is extracted only during the 1st period if (a) the marginal willingness to pay for oil in each period is given by P = 34 - 0.2q, (b) marginal cost of extraction is constant at $3 per unit, and (c) discount rate is 2%?
Burlington Motor Carriers, a trucking company, is considering the installation of a two-way mobile satellite messaging service on its 2,000 trucks. From tests done last year on 120 trucks, the company found that satellite messaging could cut 60% of its $5 million bill for long-distance communications with truck drivers. More importantly, the drivers who used this system reduced the number of "deadhead" miles-those driven without paying loads-by 0.5%. Applying that improvement to all 230 million miles covered by the Burlington fleet each year would produce an extra $1.25 million in savings. Equipping all 2,000 trucks with the satellite hookup will require an investment of $8 million and the construction of a message-relaying system costing $2 million. The equipment and onboard devices will have a service life of eight years and negligible salvage value; they will be depreciated under the five-year MACRS class. Burlington's marginal tax rate is about 38%, and its required minimum…
Consider a forester who must decide when to cut down a growing tree. Suppose the net value of the tree at any continuous time t is given by f(t) = 10exp{0.01t2}. Assume also that the (continuous) market interest rate is given by r = 0.04. The present discounted value of the tree owner 10 years after it is planted is ???
A company manufactures Products A, B, and C. Each product is processed in three departments: I, II, and III. The total available labor-hours per week for Departments I, II, and III are 1020, 1080, and 900, respectively. The time requirements (in hours per unit) and the profit per unit for each product are as follows. Product A Product B Product C Dept. I 2 1 2 Dept. II 3 1 2 Dept. II 2 2 1 Profit $18 $12 $15 If management decides that the number of units of Product B manufactured must equal or exceed the number of units of products A and C manufactured, how many units of each product should the company produce to maximize its profit?