A7. You own a gold mine. The current market price of gold is $200 per ounce; the interest rate is 12%. The marginal extraction cost of gold is constant over time at $25. Under Hotelling's Rule, what price do you expect in two years' time? to is 5% and is expected to stay at that level. Consumers can borrow and for these situations:
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- Optimizing economic agents use the real interest rate when thinking about the economic costs and returns of a loan. Suppose the average rate paid by banks on savings accounts is 0.80% at a time when inflation is around 1.95%. For the average saver, the real rate of interest on his or her savings is ___%.Martin Shrood purchased a vacant lot outside of London for £13,500, because he heard that a shopping mall was going to be built on the other side of the road. He figured that he could make a bundle by puttingin a fast-food outlet on the site. As it turned out, the rumor was false. A sanitary landfill was located on the other side of the road, and Martin’s land was worthless. (£ denotes the British monetary unit, pounds sterling.)*Required: With respect to the economic characteristics of costs, what type of cost is the £13,500 that Martin paid for the vacant lot?Terminal Activity PROBLEM SET Study and solve the given problems below. Show your complete solutions and label your answer. Write your ANSWER on your sheet. 1. Pamela makes a monthly salary of 27,900 pesos. She also receives an additional 9.5% commission rate bonus for any sales beyond 55,000 pesos. If Pamela sold 81,500 worth of merchandise this month, what is her total gross salary? 2. John is a realtor agent. He receives 5% commission when he sells a condo unit. How much commission will he receive for selling a condo unit that cost 3,500,000 pesos? 3. Randy was paid a commission of 8.5% on his total sales. If his sales were P13,000, P15,000, P25,000, P30,000, and 33, 000 pesos consecutively, find his gross earnings.
- Interest Rate (%) 2004 0 $75 150 225 Investment ($) Price Level Interest Rate (%) AS Q₁ Real GDP X Investment Demand 0 $50 100 150 Investment ($) -AD₂ (/=$100) AD3 (/=$50) Z AD₁ (/=$150) O Increase the money supply from $75 to $150 billion. O Increase the money supply from $150 to $225 billion. O Decrease the money supply from $225 to $150 billion. O Make no change in the money supply. Refer to the above diagrams, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The interest rate in the economy is 12 percent. What should the Fed do to achieve a noninflationary full-employment level of real GDP (Qf)?If one's salary is $100k per year, the interest rate is 0.5 % (bank's rate), and the withdrawal cost is $300: money demand and withdrawal amount? If an individual can also buy perpetual bonds (either bond or having bank deposit, no other investment), what percentage should she keep in the bank (and buy bonds with the rest)? Explain (current year)Name a of product or service which the banks render. Name the inputs that are required to produce these goods or services. Relate the concepts of microeconomic theory with respect to the supply and demand of the inputs required to produce the good/s and the good/s itself. Consider relating to elasticity/inelasticity; substitutes and complements; derived demand; marginal costing; rival / non-rival goods; price formation.
- Answer the two questions below with solutions. a. A certain sum of money amounts to 7/4 of itself in 3 years. The simple interest rate is? b. The tag price of a certain commodity is payable in 90 days but if payed in 15 days there will be a 10% discount. Find the annual rate of simple interest.This is NOT for a grade ( please don't decline) Question 1: An American family goes on vacation to see h to r beautiful city of Cambridge England. They have budgeted $7000 to spend. How many pound Sterling will $7000 buy in month 1 vs month 2 and based on that when should they go vacation. Show your math Question 2: Japan Airlines is interested in purchasing new commercial aircraft from US at a price of $102 million per aircraft. What is the difference in the yen price between month 1 and month 2 based on this what month is Japan airlines more likely to buy. Show Math Question 3: An Irish family is buying Chinese Silk in a local retail store in Shanghai. Which month is it cheaper to buy. Show your mathYour firm is based in the UK, just received USD 825,000 from a customer in the U.S., and wants to convert the USD to GBP. The bank is quoting a spot rate of GBP/USD 1.2283 - 1.2425. How much will you receive in British pounds (GBP)? A. GBP 1,013,348 B. GBP 663,984 C. GBP 671,660 D. GBP 1,025,063
- CBA Supply is looking at relaxing their credit standards. Using the information below, calculate net profit (loss) from implementation of the increased sales due to relax in credit standards. Current bad debt is 1.5% of sales. Proposed new bad debt would be 2.5% of sales. Show your work progression. Sales price/unit Sales units current Sales units new VC Opport. Cost $30 40,000 42,000 $18 0.10 ACP old 30 ACP new 40You quit your job as an analyst making $50,000. You then take your $500,000 in savings and open a Mighty Taco restaurant. You work roughly the same hours as before and make $60,000 per year from the restaurant. Assume the interest rate on government treasury notes is 5%. Calculate the economic profit or loss from your move in year 1. (Include a negative sign if it’s a loss)Enter as a value.Assume the annual fixed term deposit rate is 3.4% in a New Zealandbank. Mary has $10,000 and plans to deposit into the bank for two years. She also wants thebank to reinvest her interests. The bank gives her the option to choose payment frequencyin each year from 1, 2, and 4. The frequency tells how many times the bank pays her theinterests. Suppose there is no interest tax.a) How much Mary will get when the deposit matures after two years, when the interestpayment frequencies per year are 1, 2, and 4 times, respectively? Which option is bestfor Mary? [5 marks]b) Former Chief Economist, John McDermott, in the Reserve Bank of New Zealand, saysthat inflation is a thief in your wallet. Suppose the inflation rate in New Zealand inthe coming a few years is 2%. What are the real rates of returns of the annual bankdeposit rate under the approximation rule, and in the exact relationship, respectively.