Draw his budget line including endpoints

Assignment Help Business Economics
Reference no: EM131244667

In a two year setting Rod has earnings of $8000 this year and earnings of $25,000 next year. He can borrow or lend at an interest rate of 25%. Draw his budget line including endpoints. What is the slope of the budget line? What is the interpretation of the slope? Suppose that Rod could choose, instead, to earn $22,000 this year and $10,000 next year. Would Rod choose this second option? Why would it be wrong to add together year one earnings and year two earnings in deciding his choice? What must you do instead? Prove which he would prefer. Does his choice depend on anything other than financial considerations?

Reference no: EM131244667

Questions Cloud

Reference to any of the principles of contract law : Do you agree or disagree with the decision in the Lambert case (p. 323, textbook). Explain by making EXPLICIT reference to any of the principles of Contract Law (say which one(s) you are using) that are in the Chapter.
Contrast the two main perspectives on business power : Compare and contrast the two main perspectives on business power in the US economy (dominance and pluralistic) and choose the one more applicable to contemporary US.
How would implementation of marginal cost pricing system : How would implementation of a marginal cost pricing system for water impact total agricultural consumption and total urban consumption of water in California?
Discuss current macroeconomic issues or events : Discussion postings will require you to read about and discuss current macroeconomic issues or events. You should draw material from reputable sources and media outlets.
Draw his budget line including endpoints : In a two year setting Rod has earnings of $8000 this year and earnings of $25,000 next year. He can borrow or lend at an interest rate of 25%. Draw his budget line including endpoints. What is the slope of the budget line? What is the interpretation ..
Extended the copyright protection : In 1988 the U.S. Congress extended the copyright protection to 95 years after the year of original publication for corporations. But copyrights holds for 50 years in Australia and 70 years in the European Union. Discuss how you as the book or music p..
Strategic alliance has become popular in global business : Strategic alliance has become very popular in global business. Discuss one strategic alliance in the healthcare industry. Then briefly describe its background, structure, operation, or challenges.
Determine optimal price both firms should be charging : ABC Firm in Industry Alpha has MC of production = $100 and they know from past experience that their Lerner index is 0.3. XYZ firm in Industry Beta has MC of production = $35 and Lerner index is 0.55. Determine optimal price both firms should be char..
Suppose two goods are produced in the economy : Suppose two goods are produced in the economy: an intermediate good, and a final good. Let E_1 and E_F be total expenditure on the intermediate and final goods, respectively. By the expenditure approach, clearly GDP is equal to E_F, since this is (by..

Reviews

Write a Review

Business Economics Questions & Answers

  What you would rather maximize your total-marginal utility

Explain what you would rather maximize your total or marginal utility? How do you think you would determine when to stop consuming if you were at an all you can eat buffeted?

  Macroeconomic indicators affect the economic decisions

The changes in the macroeconomic indicators affect the economic decisions of the 3 economic agents (household, firms, and government). Assume you are a business owner (manager). How do you use macroeconomic indicators in your business plan and strate..

  Calculate the cost of adding third machine

The XYZ Printing Co. wants to calculate the cost of adding a third machine. Comment on the following statement made by the company accountant: “If we add a third printing press, our total costs will increase from $870 to $960. Therefore the marginal ..

  Calculate the standard deviation of annual sales

Calculate the standard deviation of annual sales. Calculate the coefficient of variation of annual sales.

  Revert to the nash equilibrium

Suppose the firms compete in quantities. If firm 1 deviates from collusion in one period, what is the profit of firm 1 in that period in subsequent periods.

  Has charterholder violated any of the cfa institute standard

A CFA charterholder is the Fund Manager for a non-profit organization. During a presentation regarding the restructuring of their investment portfolio's asset allocation, the Head of the Finance Committee questions the manager. As part of his resp..

  Describe the origin and growth of government

Briefly describe the origin and growth of government-provided pensions beginning with Germany in 1881 and attempts to establish a federal pension in the U.S. prior to 1935

  Educational efficiency and patient care quality

The various kinds of health professionals are educated in separate schools but with considerable overlap in curricula and training requirements. They are, however, expected to integrate their training and work together after graduation. Identify the ..

  Which distribution of income would rawls prefer

Consider two communities. In one community, ten families have incomes of $100,000 each and ten families have incomes of $20,000 each. In the other community, ten families have incomes of $200,000 each and ten families have incomes of $22,000 each. Wh..

  Explain how much do you believe will be the budget share

Suppose that after five years consumer spending doubles to 400. Explain how much do you believe will be the budget share of leisure.

  How the limit on the amount of reimbursement

how the limit on the amount of reimbursement is not the only effective way to decrease expenditures for health care if health care providers succeed in increasing the demand.

  Consider a market with a demand curve

Consider a market with a demand curve of P=10-Q and a supply curve of P=Q. Before the imposition of a tax, equilibrium quantity is 5, and equilibrium price is $5 (verify this). If a tax of $5 per unit is placed on this market, quantity traded falls t..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd