Roman loves corn bread. He buys corn meal and wheat flour in order to make corn bread. His recipe calls for two cups of corn meal and one cup of flour for each batch that he bakes. More corn bread is better for Roman. He can bake fractions of a batch, but has no use for corn meal or flour that is left over. What of the following is Roman’s utility function on cups of corn meal, denoted by c, and cups of flour, denoted by f?(A) U(c,f)=min{c,2f}
(B) U(c,f)=min{2c,f}
(C) U(c,f)=min{2c,3f}
(D) U(c,f)=min{3c,sf}
(D) U(c,f)=2c+3f
Answers
Answer:
(B) U(c,f)=min{2c,f}
Explanation:
This is an example of Leontif utility function which states that the preferences of a consumer is to a constant ratio of quantities of two or more goods in his demand bundles and having an extra unit of a single good will not increase the utility of the consumer and will make the extra unit to waste. But having more units of all the goods in the demand bundle which maintain the constant ratio will increase the utility of the consumer.
A good example usually used in economics is that of a pair of shoe. Having one right and one left of a type of shoe gives a consumer utility at a constant ratio of 1:1, and increasing each leg by multiple of one at every point in time will increase the utility of the consumer, while increasing just only one makes the utility not to change. For instance, having only two left shoe will not give the consumer any utility and make both the left shoe useless.
In the question, the ratio of cups of corn meal, denoted by c, and cups of flour, denoted by f, is 2:1. This implies that to increase the utility of the consumer, c has to increase by a multiple of 2 at every point in time while f has to increase by one at the same point in time to maintain the constant ratio of 2:1. Increasing only c by 2 or only f by 1 will maintain the constant ratio and it will lead to a waste of the increased unit of the affected commodity.
Therefore, option (B) U(c,f)=min{2c,f} is the correct answer that gives a constant ratio of 2:1 = 2c:f.
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Related Questions
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Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 2.00%. What rate of return should investors expect (and require) on this fund?Stock Amount BetaA 1075000 1.2B 675000 0.5C 750000 1.4D 500000 0.75
A firm has the following accounts and financial data for 2017: Sales Revenue $3,060 Accounts Receivable $500 Interest Expense $146 Total Operating Expenses $600 Cost of Goods Sold $1,800 Preferred Stock Dividends $28 Accounts Payable $240 Inventory $200 Number of Common Shares Outstanding 1,000 Tax Rate 40% The firm's earnings per share for 2017 is ________.
Answers
Answer and Explanation:
The journal entries are shown below:
1. On July 1 2019
Machinery Dr $67,000
Fixture & Fittings Dr $68,000
Vehicles Dr $35,000
Current assets Dr $12,000
Goodwill Dr $28,000
To Current liabilities $18,000
To Share Capital (80,000 × $1 ) $80,000
To Paid in capital in excess of par 112,000 {80,000 × ($2.40 - $1)}
(Being the acquisition is recorded)
For recording this we debited all assets as it increased the values of assets and credited the liabilities and stockholder equity as it also increased
2. On July 1 2019
Paid in capital in excess of par $1,600
To Cash $1,600
(Being the share issuance cost is recorded)
For recording this we debited the paid in capital as it reduced the stockholder equity and credited the cash as it reduced the assets
Working notes:
For goodwill amount
= Purchase consideration - net identifiable assets
= $192,000 - $164,000
= $28,000
The net identifiable asset come from
= $67,000 + $68,000 + $35,000 + $12,000 - $18,000
= $164,000
Answers
Answer: Option E
Explanation: Unhealthy company culture refers to negative environment within the organisation that affects all the members working in it. In simple words, it is the behavior of the organisation towards its various stake holders.
A hyper adaptive culture in an organisation depicts that the employees of the organisation have the ability to adjust in new situations, thus, the company could grab new opportunities better than others. This will result in competitive advantage to the company.
Hence, option D is an example of healthy company culture.
Answers
Answer:
The percent change in labor productivity is 22%
Explanation:
Listing out the parameters given:
labor productivity (2009) = 3.33 units/hr,
labor productivity (2010) = 4.27 units/hr
To calculate the percent change in labor productivity, we have it thu:
percent change in labor productivity = [labor productivity (2010) - labor productivity (2009)] ÷ labor productivity (2010)
Let's assume 'Labor productivity' = LP
%Δ in LP = * 100% =
* 100%
%Δ in LP = * 100% = 22%
%Δ in LP = 22%
This shows an increase in computer manufacturing from 2009 to 2010 by 22%
Answer:
percentage change in labor productivity = 28.23%
Explanation:
In 2009 the computer manufacturer had a labor productivity of 3.33 units per labor hour. In 2010 the productivity increased to 4.27 units per labor hour.
The percentage change in labor productivity can be calculated as
change in labor productivity = New labor productivity - Old labor productivity
percentage change in labor productivity = change in labor productivity/old labor productivity × 100
Old labor productivity = 3.33 unit
New labor productivity = 4.27 unit
change in labor productivity = 4.27 - 3.33 = 0.94
percentage change in labor productivity = 0.94/3.33 × 100
percentage change in labor productivity = 94/3.33
percentage change in labor productivity = 28.2282282282
percentage change in labor productivity = 28.23%
Answers
Answer:
The answer is $3,214,285.71
Explanation:
Price of each award is $45,000
And there are 5
Therefore, we have 5 x $45,000
=$225,000.
So, $225,000 is the future value.
Rate of return(r) in 7% and it is being assumed that it is forever.
So, so how much will be needed to fund his prizes(present value)?:
PV = FV/r
= $225,000/0.07
=$3,214,285.71
b. reveals whether a company is competitively stronger than its closest rivals.
c. is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors.
Answers
Answer:
The correct answer is letter "B": reveals whether a company is competitively stronger than its closest rivals.
Explanation:
The SWOT analysis is composed of a company's four (4) factors: Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are inner factors of the entity while opportunities and threats are external factors that could influence the operations of the business.
The first layer of the SWOT analysis involves the strengths of the firm which could be optimal employees attitude towards work, efficient and effective customer service or low-cost manufacturing. These are components make companies stronger than their competitors.
Final answer:
A SWOT analysis helps in crafting a strategy that aligns with a company's internal dynamics and its external environment. It is a broad diagnostic tool rather than a mechanism for direct benchmarking against competitors or industry standards.
Explanation:
A SWOT analysis is a strategic planning tool used to identify the Strengths, Weaknesses, Opportunities, and Threats associated with a company or project. Its purpose is to craft a strategy that capitalizes on the company's strengths, mitigates its weaknesses, leverages opportunities and protects against threats.
An effective SWOT analysis:
- Does not directly measure whether a company's value chain is longer or shorter than those of key rivals. Instead, it may highlight areas within the value chain that represent strengths or weaknesses.
- May reveal if a company has competitive strengths or weaknesses relative to its closest rivals, but it does not quantify competitive strength.
- Helps to determine whether a firm's strategy is aligned with industry key success factors, although it is more of a general tool rather than a specific benchmarking mechanism.
The correct answer to the student's question is option c, as it closely aligns with the intent of SWOT analysis to ensure a firm's strategy is in tune with the key success factors of its industry. However, it's worth noting that a SWOT analysis is a broad diagnostic tool and may not necessarily be used for benchmarking in a strict sense.
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Answers
Final answer:
The supply of money increases when the Federal Reserve purchases bonds, as this practice results in banks having more cash, which in turn increases the money supply in the economy.
Explanation:
The supply of money increases when the Federal Reserve purchases bonds. In this scenario, banks get cash which then translates to an increased money supply in the economy. This is called an open market operation, which is one of the tools the Federal Reserve uses to influence the supply of money and ultimately interest rates. An increase in the value of money, interest rates, or velocity does not directly increase the money supply. Rather, these factors can affect the demand for money or the speed at which money circulates in an economy.
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Final answer:
The supply of money increases when the Federal Reserve purchases bonds, as this inserts more money into the economy. Value increase, interest rate increase, or increased velocity do not directly increase the money supply.
Explanation:
The supply of money increases when the Federal Reserve purchases bonds. This is part of monetary policy used by the Federal Reserve to control inflation and the economy. When the Federal Reserve purchases bonds, it essentially creates money and puts it into the economy, increasing the total supply of money. This is in contrast to when the value of money increases, the interest rate increases, or the velocity (speed at which money changes hands) increases which don't directly increase the supply of money.
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