Introduction
The production, consumption, and distribution of goods and services are
the subject of economics, a branch of social science. It aims to comprehend how
people and civilizations distribute finite resources to meet their endless wants
and requirements. In this essay, we'll look into four economics-related issues.
Four Economic related issues
Question 1:
To figure out the maximum amount we should pay in this situation, here below is
the formula to use:
PV = CF / (1 + r)n
Where PV is the present value, CF is the cash flow, r is the opportunity cost of
using funds, and n is the number of periods.
In this case, CF = $250,000, r = 8%, and n = 5. Therefore, the present value of the
asset is:
PV = $250,000 / (1 + 0.08)5 = $250,.469 = $170,087.3
Therefore, the maximum amount that an individual should pay for the asset is
$170,087.35
Question 2 answers:
A.Suppose the supply function for product X is given by Qxs = −30 + 2Px − 4Pz.
When Px= $600 and Pz=$60, the amount of product X produced is:
Qxs = -30 + 2($600) – 4($60)
Qxs = 930 units.
, Therefore, when Px is $600 and Pz is $60, the amount of product X produced is
930 units.
B. when Px = $80 and Pz = $60, we need to substitute these values in the
supply function and solve for Qxs:
Qxs = −30 + 2Px − 4Pz
Qxs = −30 + 2($80) − 4($60)
Qxs = −110
Therefore, when Px = $80 and Pz = $60, the amount of product X produced is
−110.
C. When Pz = $60. For good X, the supply function and inverse supply
function should be determined. Qxs = −30 + 2Px − 4Pz
Qxs + 30 + 4Pz = 2Px
Px = (Qxs + 30 + 4Pz) / 2
Therefore, the supply function for product X when Pz = $60 is:
Px = (Qxs + 150) / 2
So, Qxs = 2Px − 150
The graph of the inverse supply function is shown below:
P
150
75
Q
The production, consumption, and distribution of goods and services are
the subject of economics, a branch of social science. It aims to comprehend how
people and civilizations distribute finite resources to meet their endless wants
and requirements. In this essay, we'll look into four economics-related issues.
Four Economic related issues
Question 1:
To figure out the maximum amount we should pay in this situation, here below is
the formula to use:
PV = CF / (1 + r)n
Where PV is the present value, CF is the cash flow, r is the opportunity cost of
using funds, and n is the number of periods.
In this case, CF = $250,000, r = 8%, and n = 5. Therefore, the present value of the
asset is:
PV = $250,000 / (1 + 0.08)5 = $250,.469 = $170,087.3
Therefore, the maximum amount that an individual should pay for the asset is
$170,087.35
Question 2 answers:
A.Suppose the supply function for product X is given by Qxs = −30 + 2Px − 4Pz.
When Px= $600 and Pz=$60, the amount of product X produced is:
Qxs = -30 + 2($600) – 4($60)
Qxs = 930 units.
, Therefore, when Px is $600 and Pz is $60, the amount of product X produced is
930 units.
B. when Px = $80 and Pz = $60, we need to substitute these values in the
supply function and solve for Qxs:
Qxs = −30 + 2Px − 4Pz
Qxs = −30 + 2($80) − 4($60)
Qxs = −110
Therefore, when Px = $80 and Pz = $60, the amount of product X produced is
−110.
C. When Pz = $60. For good X, the supply function and inverse supply
function should be determined. Qxs = −30 + 2Px − 4Pz
Qxs + 30 + 4Pz = 2Px
Px = (Qxs + 30 + 4Pz) / 2
Therefore, the supply function for product X when Pz = $60 is:
Px = (Qxs + 150) / 2
So, Qxs = 2Px − 150
The graph of the inverse supply function is shown below:
P
150
75
Q
