User Account

All Pages

Investment is more than depreciation

Assignment Help Microeconomics
Reference no: EM13876843

1. Let Kt denote the market value of capital stock of a firm at the beginning of year t. Assume λ is the rate of firm's capital depreciation each year. Further assume that the firm makes I dollar of new capital expenditure or investment each year.

2. (a) Write the first order difference equation relating the capital stock of the firm at the beginning of the year Kt +1 to the capital stock and investment in year t

(b) Solve the equation. What would happen to the firm's capital stock if

(I) Investment is more than depreciation?

(II) Investment is only for replacement of the depreciated stock?

(III) Investment is less than depreciation?

Reference no: EM13876843

Questions Cloud

After how many years the price level doubles : If the annual inflation rate remains stable at 3.5 %, what is the aggregate price index after 10 years? (Hint: the initial price level is the price index at the base year).
Prepare a revised variance report for yuba machine company : Prepare a revised variance report for Yuba Machine Company using practical capacity as the basis for determining the fixed overhead application rate.
Write out a variable cost (vc) function : Given the total cost function C=q3+5q2-12q-75 write out a variable cost (VC) function . Find the derivative of the variable cost function, and interpret the economic meaning of that derivative.
What would be the firm''s capital stock after 5 years : In problem (4) assume that the firm's initial capital stock is $5 million. Also assume the rate of capital depreciation is 10 % a year. What would be the firm's capital stock after 5 years if annual investment are- $600,000
Investment is more than depreciation : Let Kt denote the market value of capital stock of a firm at the beginning of year t. Assume λ is the rate of firm's capital depreciation each year. Further assume that the firm makes I dollar of new capital expenditure or investment each year.
Discuss various applications of genomics and biotechnology : Describe how exactly the technology works. Discuss the biological principles that underlie this technology and discuss the various applications of genomics and biotechnology.
Compute the actual cost of material used per unit of product : Compute these: 1. The actual cost of material used per unit of product produced this year. 2. The standard materials cost per machine hour. 3. The budgeted direct labor cost for each unit produced.
Identify key points of a relevant economic article : Identify at least four (4) key points of a relevant economic article from either the Strayer Library or a newspaper and explain how the concept that you identified could affect the U.S. economy.
Explain the role emotions plays in any conflict situation : This paper needs to explain the role emotions plays in any conflict situation. Research on emotions and conflicts should be explained and cited. The paper also needs to discuss the strategies that should be used to effectively introduce and implem..

Reviews

Write a Review

 

Microeconomics Questions & Answers

  About investments in general and specific human capital

Which of the following statements is true about investments in general and specific human capital?

  Specific techniques that managers might use

What are some of the specific techniques that managers might use to manage team meetings? Of those you identify, which do you see as the most effective and under what circumstances?

  What is elasticity of its demand with respect to advertising

Determine the profit maximizing ticket price for the theater. What is the price elasticity of its demand at this price? What is the elasticity of its demand with respect to advertising?

  Compare and contrast an import quota and a tariff-rate quota

Compare and Contrast an import quota and a tariff-rate quota (TRQ) in terms of how each one will impact exports, imports, prices, production, consumption and world trade using a THREE PANEL DIAGRAM.

  The equivalent uniform annual payment is closest to

A payment of $20,000 6 years from now is equivalent, at 11% interest, to an annual payment for 12 years starting at the end of this year. The equivalent uniform annual payment is closest to?

  Determining opportunity cost

Describe why it would cost Andre Agassi or Venus Williams more to leave professional tennis tour and open the tennis shop than it would for the coach of the univeristy tennis team to do so.

  Graph of the production possibilities frontiers

What is the graph of the production possibilities frontiers for the American and Japanese economies if American worker can produce 10 tons of grain a year and Japanese worker can produce 5 tons a year?

  What price will the profit maximizing monopolist charge?

What price will the profit maximizing monopolist charge?

  Draw the correct relative wage curve describing the economy

Draw the correct relative wage curve describing the economy. Mark any stable equi¬librium with filled circles and unstable equilibrium with an open circle. What is the dispersion force in this model

  Estimate each of the alternatives from perspectives of

branding iron products a specialty steel fabricator operates a plant in the town of west star texas. the town has grown

  What portion of variation in sales is explained by

the maker of a leading brand of low-calorie microwavable food estimates the following demand equation for its product

  Develop demand supply analysis based on data you collected

choose a major publicly traded automotive producer such as general motors ford toyota or volkswagen. then research this

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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