... from the table above so that a=830+85.7*4 .11 =11 72.3 or a=850+85.7*3.76 =11 72.3. The equation for the demand curve is therefore Q =11 72.3-85.7P. 15 Chapter 2: The Basics of Supply and Demand ... that: 18 .74 + 0.07P = 24.08 - 0.06P, implying that P = $ 41. 08 in the short run; and 14 .78 + 0.29P = 32 .18 - 0.51P, implying that P = $ 21. 75 in the long run. 10 . Refer to Example 2 .10 , which ... (millions) Supply (millions) 60 22 14 80 20 16 10 0 18 18 12 0 16 20a. Calculate the price elasticity of demand when the price is $80 and when the price is $10 0. We know that the price elasticity...
... have to spend in 19 95 versus 19 90 if she consumed the same amounts of food and clothing in 19 95 as she did in 19 90. That is, the Laspeyres index for 19 95 (L) is given by: L = 10 0 (Y′)/Y where ... 8-ounce soft drink she pays $1. 508 oz= $0 .19 per oz. When she buys the 12 -ounce size she pays $0 .17 per ounce, and when she buys the 16 -ounce size, she pays $0 .14 per ounce. Given that there ... bundles. The indifference curve with a utility of 12 00 has the equation 10 DF =12 00, or DF =12 0. Choose combinations of D and F whose product is 12 0 to find a few bundles. b. Graph Jane’s budget...
... investment is ER = (0.999)( -1, 000,000) + (0.0 01) (1, 000,000,000) = $1, 000. The variance is σ2 = (0.999)( -1, 000,000 - 1, 000)2 + (0.0 01) (1, 000,000,000 - 1, 000)2 , or σ2 = 1, 000,998,999,000,000. ... 0.5()90.5()+ 0.25() 10 0.5( )+ 0.2( ) 11 0.5( )+ 0.05( ) 16 .50.5( )= 3 .15 7. This is less than 3 .16 2, which is the utility associated with not buying the ticket (U (10 ) = 10 0.5 = 3 .16 2). He ... she has $10 ,000 and is offered a gamble of a $1, 000 gain with 50 percent probability and a $1, 000 loss with 50 percent probability. Her utility of $10 ,000 is 10 , (u(I) = 10 *10 = 10 ). Her...
... 18 . The market is often considered to be relatively efficient up to the semi-strong form. If so, ... no abnormal return can be expected from purchasing after the publication of the article. . 19 . Under the semi-strong form of market efficiency, the stock price should stay the same. The ... announcement. Thus, one cannot expect abnormal returns following the announcement. CHAPTER 13 CORPORATE FINANCING DECISIONS AND EFFICIENT CAPITAL MARKETS For this chapter, consider...