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Find the highest interest rate:
There are 2 entrepreneurs, Sally and Paul. The return to their projects are given by:
To finance the project, each entrepreneur needs to borrow from a bank an initial capital of 100. The loan contract stipulates that if the project return is high, then the firms pays principal plus interests, and if the project return is low, then the bank seizes whatever value that the firm has left over. Find the highest interest rate at which Sally is willing to borrow, the highest interest rate at which Paul is willing to borrow, and the bank's expected net profit if the interest rate is 10% and 18%, respectively.
The question states that a hotel charges $60 a night for a room per night during off peak. This hotel has a fixed cost of $75 per night and variable costs of $40 per night (only ap
explain normal profits and abnormal profits
Slutsky Theorem - Mathematical Presentation: We already know from the first order conditions of utility Maximisation that, where D ij is the co-factor of the ith ro
What is the theory of absolute and comparative advantage?
Two firms, A and B, are planning to bid for a contract of Motorway extension in Mauritius. Suppose: (1) firm B is a newly established company and has already incurred a st
U+v, UV, u/v
What is equilibrium point
In a competitive market, the market demand is Qd = 150 - 5P and the market supply is Qs = 5P - 10. As a result of a price ceiling imposed at $14, the new consumer surplus and produ
The demand schedule for computer chips is given in the table. Price (dollars per chip) Quantity demanded(millions of chips per year) 200
What are the possible advantages of free trade? Firms a) Specialisation and enhanced use of comparative advantage b) Possibility of advantages of scale c) Spread
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