Category: Economics Homework Help

We are still helping Catherine to gure out the business strategy of her
house-made lunchbox venture (All the analysis is for one day of operation).
Determined by the optimal input decision we solved last time, Catherine’s
business has Total Cost:
C(Q;K) = 50Q2 + rK
which depends on Q number of output – lunch box produced and K units
of capital input as x cost.
The capital (kitchen, all the kitchen wares, and raw materials) rents (de-
noted by r) for $20 per hour, labor can be hired for $30 per hour (wage
denoted by w).
Catherine wants to applies her economics knowledge to make the optimal
decision to maximize her prot.

Bonus 1. Analyzing Catherine’s Prot Maximization under both Scenarios
a. Compare and discuss the result between Scenario 1 and 2.
b. Plot one graph to each scenario, with the corresponding Demand,
MR, MC, ATC, AVC.
c. Indicate the optimal decision, prot on each graph. If there
are areas involved in the graph, please shade them and provide
legend properly.
Bonus 2. Indicate the Deadweight Loss (Social Loss) in your graphs above. In
Scenario 2, suppose now government wants to regulate the monop-
olist Catherine to obtain the social efficiency (only consider social
loss are all generate from monopolistic price manipulation, disregard
that Catherine actually uses her intelligent to create her product).
Bonus 3. All the Q1 are for the first day of operation (the x cost happens only
on the first day). Does it still make sense if Catherine makes negative
prot on her first day? What will be the daily prot for the operation
since the second day of operation in each scenarios? At least how
many days will Catherine reach the break-even point in each scenarios
(for making overall prot reach back to non-negative)(round up to
the next integer)?
2

Catherine plan to start a house-made lunchbox business that sells healthy
lunchbox during the COVID pandemic. The business has a production
function
Q = 10K0:3L0:7
where K denotes the unit of capital inputs per hour and L denotes the
unit of labor inputs per hour used in producing Q number of lunch box.
The capital (kitchen, all the kitchen wares, and raw materials) rents for
$20 per hour, labor can be hired for $30 per hour.
Catherine wants to applies her economics knowledge to make the optimal
decision to minimize the cost of the production.

Bonus 1. Solve the Q1c and Q1d by using Lagrangian
a. Write down the Cost Minimization Problem.
b. Write down the corresponding Lagrangian.
c. Find the optimal capital-labor ratio.
d. Given $10,000 budget find the exact optimal amount of labor
input, capital input and total output level.
Bonus 2. Fill the rest of the blanks in Q1c. And draw a sketch of AC, AFC and
AVC in the same graph (no need to be extremely precise, just with
the numbers calculated from the table and the correct curvature).

The question is : You have dreams of taking a sabbatical from work in 12 years and travelling the world.You are a thrifty traveler, and in part you will take part time jobs while travelling and thus you figure you will only need $12,000 to support your first year of travel. (Note: this $12,000 will be needed in exactly 12 years from today.)Each year your need for funds to support the next year of travel will increase 3% in order to keep up with inflation.You plan on travelling for 6 years, at which time you will go back and resume your career.You will thus need 6 years of payments to support your travel sabbatical. You currently have $10,000 of student debt which you also want to have paid off before you start your travels.To pay for your debt, and to pay for your travel sabbatical, you plan on starting a savings account with the first annual deposit being exactly one year from today.If you make 10 deposits that grow 4 percent per year, how much must your first deposit be in order to meet your goals.Assume that the semi-annual discount rate is 9.76%Be sure to show your work.

You should finish this question on Excel and Word document, show the process please. please notice the semi-annual discount rate not annuallyd.

Worker Hours to Produce One Unit

1. Use the chart in the lesson to identify one developing country (choose Country A or Country B) and one developed country (choose Country C or Country D) to compare to the United States. Use the tables below to record data from the chart in the lesson for each country. Then respond to the analysis questions.
   Additional research is not required to complete this assignment. Please use only the information provided in the chart in the lesson for countries A, B, C, D, and the United States.
   Table 1: Identify one developing country (A or B) and one developed country (C or D) along with the United States. Complete a trade analysis for agricultural products.
   Hint: Number of additional worker hours to produce one unit of citrus instead of one unit of corn = number of worker hours to produce one unit of citrus – number of worker hours to produce one unit of corn

1. Table 2: Identify one developing country and one developed country along with the United States. Complete a trade analysis for industrial products.

2. Analysis—Using the data you collected, answer each of the following analysis questions in well-written paragraphs in your own words.
   1. Identify an example of absolute advantage relative to the United States from your data tables. Be sure to identify which country has absolute advantage (United States or country A, B, C, D), the product, and data to support your claim. Tip: When considering absolute and comparative advantage, worker hours to produce one unit is a reflection of productivity.
   2. Identify an example of comparative advantage relative to the United States from your data tables. Be sure to identify which country has comparative advantage (United States or country A, B, C, D), the product, and data to support your claim.
   3. Explain why most trade occurs because of comparative advantage. Be sure to provide examples from the data tables or from the lesson to support your answer.

1) A central bank is facing the following problem. There are signs that inflation is picking up in the economy. Some analysts suggest that this is a temporary phenomenon, and that in a few quarters, inflation will again be consistent with the inflation target set by the central bank.

Other analysts point instead to the possibility that the current pick-up in inflation will not be temporary and that, absence any central bank action, the future inflation rate will exceed the inflation target for a significant amount of time.

As the adviser to the Governor, you will have to brief her on the options she needs to consider. In particular, she needs to be briefed on what would be the consequences of: (i) relying on analysts who think the current inflation is temporary if this turns out to be wrong, versus (ii) relying on the analysts who think the current inflation is more permanent if it turns out that this is not the case.

2)Your Governor has received policy advice from the Heads of two Departments in the bank, the External Department and the Monetary Policy Department. As his trusted Counselor, the Governor has asked you to explain the macroeconomic logic behind each of the proposals he has received. The Governor would also like you to explain whether, in the context of your economy, one of them is more appropriate than the other. To answer this last part of the question, you may need to make assumptions about the structure of Saudi economy. You will not be assessed on which assumptions you make, but rather on whether your advice is consistent with your choice of assumptions.

Advice 1, External Department.

“We need to pursue an expansionary monetary policy to engineer a depreciation of our currency so that we gain international competitiveness for our export industry, improve our current account balance, and increase employment.”

Advice 2. Monetary Policy Department

“A depreciation of our currency will only lead to wage and price inflation, and will have no lasting impact on competitiveness, the current account balance, and employment. We should instead focus on achieving our inflation target.”

–

3)Your Governor is contemplating lowering the policy rate to stimulate the economy since the current and forecasted inflation rate is below target, and since output is currently below potential. But the Governor is uncertain about whether lowering the policy rate will actually be transmitted to the broader economy and to inflation in particular, since the policy rate is a very short-term (overnight) interest rate that directly affects principally activity in the interbank market.

The Governor has asked you to brief her on the nature of the transmission mechanisms of monetary policy, in particular on the interest-rate channel, the credit channel, and the exchange rate channel. In particular, she would like to know what conditions in the economy might make the transmission mechanism less effective than hoped for.

An important element of healthcare finance involves the management of short-term (current) assets and liabilities, which is commonly called, “working capital management. A hospital is likely to have a significant proportion of its balance sheet assets in a range of short-term assets. 

Address the following requirements:

Explain some of the aspects of working capital management that a financial manager needs to consider when determining a suitable level of working capital for that organization. 

Explain why you consider these elements to be important and the potential impact they could have on the organization if they are not managed appropriately.

Power-Point Presentation Assignment

Prior to completing sample draft, read the Financial Systems, Industrial Structure, and Growth article.

Assume that you are an investment advisor at one of the local brokerage firms where you reside. Your manager has requested you give a presentation to a newly formed investment club on how financial institutions and financial markets operate.

Develop a 10-to 12-slide presentation that addresses the following elements:

• Defend the study of financial institutions and financial markets.
• Determine the key participants in financial transactions.
• Describe and diagram the three different methods of capital formation.
• Examine financial intermediaries including their purpose, structure, and operation.
• Explain how financial intermediaries and financial markets are dependent on each other.
• Explain the importance of fully developed financial markets.
• Must be a 10-to 12-slide presentation in length (not including title and references slide, use the individual slide note sections to provide additional content material and citations) and formatted according to APA style
• Must use at least four scholarly and credible resources.
• Originality score of 20% or less is required.

RISK ANALYSIS, REAL OPTIONS AND CAPITAL BUDGETING

Baldwin Corporation is a public corporation listed on New York Stock Exchange (NYSE) market. The company researches, develops, manufactures, and sells various products in the health care industry worldwide. Baldwin Inc. operates in three main segments: consumer, pharmaceutical, and medical devices segments. The primary corporate objective of the company is to maximize the value of the owners’ equity by increasing the price of its shares in the stock market. Unfortunately, the company’s stock price has been declining over the past year because of declining sales, cash flow uncertainties, and weak financial ratios. The board of directors have hired a new CFO, Jeff Warren to turnaround the fortunes of the company. Jeff earned his PhD in Finance from UC in 2018. After his MBA he worked for five years as sales and marketing consultant for a pharmaceutical company. As a result, Jeff does not have much work experience in corporate finance, although in his graduate finance courses, he learnt about time value of money and its applications in financial and investment decisions.

Despite his lack of experience in corporate finance, Jeff wants to create value for the company through efficient management of working capital, and prudent capital budgeting activities by expanding the company’s products into new markets. He is considering a capital investment either in the State of Ohio or North Dakota because of growing market demand for the company’s products in both States and the recent changes to the States’ tax legislations that give tax incentives to new companies. The company has announced plans to invest about $2.2 million in its medical devices and pharmaceutical segments. Jeff believes that decisions such as these, with price tags in the millions, are obviously major undertakings, and the risks and rewards must be carefully weighed. Jeff knows that good financial decisions increase the value of a company’s stock, and bad financial decisions decrease the value of the stock. Jeff is working hard to make Baldwin Inc. one of the leading firms in the health care industry.

Jeff has been reading articles in financial journals on capital budgeting decisions and risk analysis. He has written down the following ideas on project evaluation techniques from book chapters and peer-reviewed articles:

1. The most popular capital budgeting techniques used in practice to evaluate and select projects are payback period, net present value (NPV), and internal rate of return (IRR).

2.Payback period is the number of years required for a company to recover the initial investment cost.

3. Net Present Value (NPV) technique: NPV is found by subtracting a project’s initial cost of investment from the present value of its cash flows discounted using the firm’s weighted average cost of capital. It shows the absolute amount of money in dollars that the project is expected to generate.

Decision Criteria of NPV

If NPV > 0, accept the project

If NPV < 0, reject the project

The decision rule for mutually exclusive project is to select the project with the highest NPV.

4. Internal Rate of Return (IRR)is the intrinsic rate of return the project is likely to generate. The IRR is the discount rate or the rate of return that will equate the present value of the cash outflows with the present value of the cash inflows (i.e., NPV = 0).

Decision Rule:

Accept the project if IRR > cost of capital

Reject the project if IRR < cost of capital

Exhibit 1: The expected cash flows in US$ from the project in Ohio and North Dakota.

*note: The year 1 cash flow includes government stimulus payment of $100,000 to support business projects.

The company’s policy is to select projects using NPV technique.

1. You have been hired as a financial consultant to help evaluate the project. Baldwin Inc. wants you to do the following:

a. Calculate the payback period for the two projects.

b. Calculate the IRR of both projects.

c. Use the NPV technique to recommend which investment project it should accept, assuming the cost of capital of financing the Ohio project is 12% and 10% for the North Dakota project?

2. Jeff knows how bad forecast can ruin capital budgeting decisions. If the cost of capital changes from 12% to 13% for Ohio project and remains the same for ND project, does the company have to pursue the project?

3. Jeff wants to analyze the risk of the project using sensitivity analysisandMonte Carlo simulation.

a. Explain to Baldwin Inc. how the two risk analysis models can be used to analyze risk of the project.

4. Jeff has estimated the fixed costs (including depreciation) of the Ohio project to be $2.5 million, sales price is $200, and the variable cost is $120, giving a contribution margin of $80. What is the accounting profit break-even quantity for this project?

5. Baldwin Inc. wants to know the likely effect of the capital budgeting decision on its stock price (increase, decrease, no change, or not sure). Choose one and explain why.

Note: Make sure to answer all the questions and attached textbook for reference and also attached question in word format and also cite accordingly.

Please write a paper, using Topic 2, using China as the subject. And use the data from the following website:

1.Federal Reserve Economic Data | FRED | St. Louis Fed (stlouisfed.org)

https://fred.stlouisfed.org/

2. PWT 9.1 | PWT earlier releases | Groningen Growth and Development Centre | University of Groningen (rug.nl)

https://www.rug.nl/ggdc/productivity/pwt/pwt-releases/pwt9.1

3.OEC – The Observatory of Economic Complexity | OEC – The Observatory of Economic Complexity

https://oec.world/en

4.Homepage | IPUMS

https://www.ipums.org/

Then, please make a PPT our of the paper, it should be a 10 mins long presentation, also with a script.