Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Problem
Assume that borrowers are not very poor, in that they have some collateral, but they are nevertheless suffering from financial exclusion. Now consider the case of two borrowers with different levels of collateral. Borrower 1 has w = $20 as collateral, Borrower 2 has no collateral at all. Borrower 1 is as productive as Borrower 2, so if they can undertake an investment project that requires $100, both can produce the same gross return y = $190 with certainty, assuming both borrowers put in sufficient levels of effort, which cost c = $30 to each of them. If the borrowers do not work hard enough, the probability of success falls to 0.5. The gross cost of capital lent is K = $140 per each $100 loan.
a. Show that if the lender can observe the effort made by each borrower, it is socially efficient to lend money to both borrowers.
b. If, on the other hand, the borrowers' behavior cannot be observed, then, show that only the one with collateral can borrow.
c. Comment on the main lesson drawn from this exercise with respect to the use of collateral to facilitate credit access.
Calculate the output and price of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dump- ing of effluent.
Which market would you pursue and which ones would you not pursue? Provide examples with factual data (and cite your sources) in your answer.
Explain what the relationship between the balance of the current account and the exchange rate should be. Be as clear as possible in your explanations
what is economics? what role does economics play in your personal and organizational decisions? provide an example of
shows the average annual growth rate in real GDP per capita for Argentina
"Starting a sole proprietorship or partnership type of business is better because the profits from the business will be enjoyed by only a single owner or a few partners." Do you agree or disagree with this statement? Why?
TC=0.2Q^2-5Q+30(Q^2 means Q square) a) What is its corresponding marginal cost curve b) If the firm faces a price of $6 per unit, what quantity should it sell c) What profit does the firm make at this price d) Should the firm shut down
as prices increase should health economists advocate giving something up opportunity coststrade-offs?as the quantity of
take two positions and explain how the trade both help and hurt the u.s. economy. provide support for your
A semiconductor is a key component in your laptop, cellphone, and iPad. The table provides information about the market for semiconductors in Canada.
Find the inverse demand curve. How much consumer surplus do consumers receive when Px=$35? How much consumer surplus do consumers receive when Px=$25? In general, to the level of consumer surplus as the price as the price of a good falls?
Suppose that labor is the only factor of production in two countries, Bladia and Garumba. In Bladia, 10 pounds of apricots requires 4 hours of labor, and 10 pounds of apples requires 6 hours. What is the opportunity cost of a pound of apples in Bla..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd