Income Approach: ----- http://en.wikipedia.org/wiki/Income_approach => Method of arriving at the appraisal value of a property on the basis of its opportunity cost. It compares the net income the property would earn if rented out over its remaining useful life with the income that could be earned if the amount of its purchase price was invested in ventures of comparable risk. Also called income capitalization approach. => The Income Approach is one of three major groups of methodologies,
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Q2B)By applying an appropriate method of optimisation, locate the quantity of components the firm should produce and the maximum profit it can earn per month Profit maximisation occurs at SMC=MR P=A+BQ MR=A+2BQ TVC = aQ + bQ2 + cQ3 AVC = a + bQ + cQ2 SMC = a + 2bQ + 3cQ2 Weekly TVC= 46Q – 0.0085 Q2 + 0.00001 Q3 Weekly AVC= 46 – 0.0085 Q + 0.00001 Q2 Weekly SMC = 46 – 2(0.0085 )Q + 3(0.00001) Q2 =46-0.017Q+0.00003Q2 Weekly demand (P) = A+BQ
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1 (option 1) Everyone’s Gasoline Problem. We are all familiar with fluctuating prices of gasoline at the pump. Why does this happen? Research the recent history of gasoline pricing in your area, and attempt to relate any fluctuations you observe to documented supply and demand factors outlined in our book. Be sure to cite any references used. History of gas prices for the past year in Columbus, OH are as follows: (per gasbuddy.com/charts) * JAN $3.31 * FEB $3.77 * MAR $3.95
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6-3 A bank in a medium sized Midwestern city, Firm X, currently charges $1 per transaction at it’s ATM’s. To determine whether to raise price, the bank managers experimented with a number of higher prices(in 25-cent increments) at selected ATM’s. The marginal cost of an ATM transaction is $0.50. ATM Fee USAGE $ 2.00 1000 $ 1.75 1500 $ 1.50 2000 $ 1.25 2500 $ 1.00 3000 What ATM fee should the bank charge? When you say "marginal cost", we have to assume you mean marginal for
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1. As consumers become pessimistic about the future of the economy, they cut their expenditures so that aggregate demand shifts left and output falls. The president and Congress could adjust fiscal policy to increase aggregate demand. They could either increase government spending, or cut taxes, or both. 2. Expansionary fiscal policy involves government spending exceeding tax revenue, and is usually used during recessions. If the Federal budget is balanced at the outset, expansionary fiscal policy
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Chapter 4 Elasticity • • • • I. The price elasticity of demand measures how strongly demanders respond to a change in the price of a good. The price elasticity of demand can be used to make quantitative predictions of how changes affect the price and quantity demanded of a good. The income elasticity of
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ssignment 1A (100 marks total) Assignment 1 should be submitted after you have completed Units 1 through 5 (Chapters 1 to 12). It is worth 10% of your final grade. Insert your answer to each question below the question. Show your calculations. None of the assignment questions require you to provide a graph. 1. Identify each of the following topics as being part of microeconomics or macroeconomics. (5 marks) a. the impact of a change in consumer income on the purchase of
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1) The Expenditure Approach This method of determining GDP adds up the market value of all domestic expenditures made on final goods and services in a single year, including consumption expenditures, investment expenditures, government expenditures, and net exports. Add all of the expenditures together and you determine GDP. 2) The Production Approach This method also called the Net Product or Value added method requires three stages of analysis. First gross value of output from all sectors
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TUTORIAL 1 (11 – 15 AUGUST) SOLUTION GUIDE FOR SUBMISSION QUESTION SAVING AND INVESTMENT: (TEXTBOOK REFERENCE: CHAPTER 2) Question 7* This question re-examines Patrick’s decision (Example 2.5, Chapter 2, BOF) to purchase a ride-on lawn mower. Patrick wants to calculate the annual cost to himself of owning the ride-on lawn mower (this is called the user-cost or user-cost of capital). He has the following information: Initial purchase price of lawn mower = $5,000 Nominal interest rate = 6% per annum
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Richards Econ112: Principles of Microeconomics Exam II Study Questions | | [pic] |1. |If S and D are the initial supply and demand curves, after the tax represented by S', is imposed, the equilibrium price is the | | |distance
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