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In 2009, ABC Company made $2M of net profit and spent $100,000 on advertisement. In 2010, it made $2.5M of net profit and spent $150,000 of advertisement. Based on this information, if ABC's advertisement expenditure increases by $20,000 in 2011, how much do you expect its net profit to increase? Explain why the ratios of net profit to advertisement expenditure in 2009 and 2010 are different from the slope of the net profit advertisement relationship.
Question: Using diagrams where appropriate, describe the concepts of scarcity, choice and opportunity cost. Distinguish between negative and positive externalities, explain
Money Supply and Monetary Policy All modern societies use money as the medium of exchange. Since money can be exchanged for goods and services it also becomes a financial asse
Tax cuts get better the economy by giving the people more spending power and higher consumer confidence, which leads to them spending more of all of their income which lead to more
Balance of Payments All countries have economic transactions with other countries. These consist of import and export of goods and services, official and private gifts and don
What is debt swept?
There is a joke among economists that children are an "inferior good." In many countries there appears to be a negative relationship between income and the number children in a hou
Q. AS-AD model with inflation? When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by Π M whereas it is Π W that appli
When investment banks underwrite IPOs, they are typically sell stock for 5-10 percent more than they pay for it. When they underwrite stock for companies that are already public, t
Q. How much money can banks create? Does that mean that banks can create an unlimited amount of money? No the answer is no - it would require them to lend an unlimited amount o
What are the different stages of analysis in planning activities?
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