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- (bIn an output maximization problem, the output f(x1, x2) = xx will be maximized subject to the budget constraint 2x, + 4x2 = 40 when x, = 10 unit and x2 = 5 unit. In this case, the Lagrange multiplier is 250 unit. What does this value of multiplier imply? %3DRefer to the below figure: the saving function can be given as: Aggregate consumption (C) 270 200 130 60 450 100 S = -60 -0.3Y O S = -60+ 0.3Y O S = 60+ 0.7Y O S = -60 -0.7Y O S = -60 +0.7Y 200 300 Aggregate income (Y)10x + 154 13 07 = 3000 In a certain country, the government spends the total yearly budget for infrastructure renovation according to the following principles: En at th projects which received funding the year before get 20% less funding than the previous year; En = C. 2^+ an additional € 20 million is assigned to new infrastructure renovation projects. ● For the year 2023, a total of € 150 million is spent on infrastructure renovation. a) Define an appropriate sequence to describe the total yearly budget for infrastructure renovation. Write down a recursive equation with initial condition for this sequence and find the general term. b) c) Describe in words the evolution of the yearly budget for infrastructure renovation. How much will be spent on infrastructure renovation over the period 2023 to 2032 (including both start and end year)? d) A new government wants spending on infrastructure renovation to evolve towards € 160 million per year. In order to do so gradually, it decides to…
- Siven that G=30, I=50,C = 0.7Y, +82,T = 0. IY + 20 Then the disposable income in the equilibrium level is (A) 400 (B) 320 (C) 60 (D) 3403. In a waterflooded mature oil field, a large scale polymer-flooding project is evaluated with a small-scale pilot-test being considered to make a decision. Without the pilot test, the existing waterflooding will continue with an estimated NPV of $36 MM USD. Historically, polymer-flooding pilot tests resulted with promising results in 65% of the cases, and results are representative for large-scale flooding in 70% of the cases (can be considered as right data are collected). • In the case of a promising pilot-test, large scale project will have an NPV of $80 MM, but if the pilot test is not representative (is wrong), this will result in a loss of $40 MM USD. • In the case of a not-promising pilot-test, existing waterflood will continue as it is, with an NPV of $36 MM USD. Calculate the value-of-information of the pilot test, by considering Lohrenz's Method.2) NPV AND DVD RELEASE TIMING Until recently, a film was released on DVD many months after it was released in theatres. The longer the film plays in the theatre, the larger is the box office revenue, but the more delayed is the DVD revenue. Then again, the sooner the film is released on DVD, the more movie fans switch from theatre viewing to DVD viewing, and if fans know the DVD is coming out soon, then they're more likely to wait and watch on DVD. Thus, the timing of the DVD launch is an interesting optimization problem. Consider a 4-month period with times t=0,1,2,3 (for April, May, June, July). Suppose that the theatrical release of your movie is always April but you can choose whether to release the DVD in Simultaneously in April, with a Slight Delay in May, or with a Long Delay in June. Using the series of cash flows shown below, find the net present value maximizing DVD release date for these three discount rates: r = 0.08, r=0.1, and r = 0.12. E.g., if you release the DVD in…
- 3) Which formula is correct? A) S=Y₁-C B) Ya+S=C C) 2(Yd) - S = C D) Ya+C = S 4) Which of the following is true? A) MPC-MPS = 1 B) MPC + MPS = 1 C) MPC MPS = 1 * D) MPC / MPS = 1An increase of R5 billion in income in a macroeconomy leads to an increase in R3billion in consumption spending. From this information, we can determine that themarginal propensity to save in this economy is:choose the correct answer(a) 0.6; (b) 0.5;(c) 0.3; (d) 0.4The builder of a new movie theater complex is trying to decide how many screens she wants. Below are her estimates of the number of patrons the complex will attract each year, depending on the number of screens available. Number of screens 1 2 3 4 5 2 After paying the movie distributors and meeting all other noninterest expenses, the owner expects to net $2 per ticket sold. Construction costs are $1,000,000 per screen. Instructions: Enter your responses as whole numbers. a. Make a table showing the value of marginal product for each screen from the first through the fifth Value of marginal product Humber of screens 1 $ 3 4 Total number of patrons 40,000 65,000 85,000 100,000 110,000 5 $ $ O Negative returns to capital O Increasing returns to capital O Diminishing returns to capital S m $ What property is illustrated by the behavior of marginal products? b. How many screens will be built if the real interest rate is 5.5 percent?
- Given: C = 100 + 0.75Yd (where Yd = Y-T)I = 120-600iG = 200T = 20 + 0.2YMs/P = 300Md/P = 50+0.5Y-600i obtain equilibrium consumptionExpenditure on building a bridge is a part of capital expenditure in a government budget. True/FalseQuestion Eleven Sharp Inc., a wholly Ghanaian owned company specializes in the production of hand sanitizers branded as Quin. The company has branches in all the regions in Ghana with its head office located at Cape Coast. It employs 1,200 people and pays an average of GH¢ 550.00 as income tax to the govemment of Ghana on a monthly basis. Suppose that seven thousand, eight hundred and twenty (7,820) units of Quin are produced and supplied by Sharp Inc. but the quantity demanded for Quin is eight thousand (8,000) units. Ceteris Paribus, a GH¢ 20.00 change in the price of Quin results in a change in quantity demanded for and supplied of 4 and 5 units, Ay respectively. [Hint: change in X due to change in Y is given as ax ]. Given the above information: a) Determine the equilibrium price and equilibrium quantities of Quin. b) Suppose the Govemment of Ghana in the wake of the COVID-19 pandemic grants a subsidy of GHs 4.50 on each Quin produced. Compute the new equilibrium price and…