There is a shrimp species whose Marginal Growth Function is MG(S) = 1 - 2S/K. Where S is the stock level and K the carrying capacity. Assume that K = 500, and the discount rate is 4%. Use the golden rule of growth to find: the optimal (profit maximizing) level of stock for this shrimp species the stock level that gives maximum sustainable yield.
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- There is a fish species has a growth function G(S) = gS(1 - ) and a K marginal growth function MG(S 2gS where all variables are defined K = g as in the lecture notes. Assume that g = 1, , K = 500. Assume that the price of fish is $30 per fish, the marginal private cost, MPC, to harvest fish is $20. In addition, assume that the discount rate is 10%. The present discount value of the profit from harvesting 225 unit in period 0 equals ----- The firm factors in the implications of depleting the stock in period O on the harvest in all subsequent periods. 13,750 11,500 12,500 12,750Suppose that you are a cattle rancher. You are deciding when to take your cattle to market to sell. You currently have a herd of 100 cattle. Each cow currently weighs 650 pounds and is gaining 50 pounds per month. Your feed costs are $40 per month per cow. Cattle prices are currently $8 per pound, but have been falling at the rate of $0.10 per month. If you are maximizing profits, how many months from now should you sell your cows?The global markets in which Lewis Fabrication plans to expand provides this company with the opportunity for entering relatively high-growth markets with a product that is in demand. Which one of the following would Lewis Fabrication be least likely to expect to find in this type of market? * No government or military influence or intervention for Lewis Fabrication Per capita incomes are rising and expected to continue to rise The middle class is growing in numbers and so is their demand for products A larger percent of the population is financially classed as below middle class in certain of these foreign markets These foreign markets are considered to have high profitability potential for companies such as Lewis Fabrication
- Find the marginal efficiency of capital if the Prospective yield is 720 and the supply curve is 40?Let us assume that four plots of land is currently used for agriculture which are denoted as A,B,C and D where A is the most productive land while D is the least productive land (marginal land). Suppose that the profit rate of land D is 10%. a) What the investors of that country are expected to do in that case if the profit rate in industry is 12% according to Ricardo? Will the D continue to be the marginal land in that case? b) What the investors of that country are expected to do in that case if the profit rate of industry is 8%? Do this lead to a change in what will be the marginal land in that case?Consider a new business that invests $20 million into a plant to manufacture loaves of bread. The market for bread is say around 100 million loaves and the new firm expects that it will be able to obtain a market share of around 5%. At that level of production, the total cost of production is $10 million. Let us say that it targets a 20% return on its investment. What should the price of a loaf of bread be? Use the principle of target rate of return pricing. If the mark-up rate is 10% what will the full-cost price be?
- Mike spends RM35,000 per annum on painting supplies and storage space. He recently received two job offers from a famous marketing firm – one offer was for RM 95,000 per year, and the other was for RM 105,000. However, he turned both jobs down to continue a painting career. If Mike sells 20 paintings per year at a price of RM 8,000 each: Question 1: What are his accounting profits? Question 2: What are his economic profits?Janine and John share profits of their partnership in the ratio of 2:3. If Janine's share in the profit for last year was P 30,000.00, how much was John's share in the profit of the business?Factory X can produce skis or snowboards. If all factory time is devoted to producing skis, 400 pairs of skis per day are produced. If the factory devotes all time to producing snowboards, 700 snowboards per day are produced. Snowboards 700 400 Pairs of Skis A recent technological advancement has positively impacted factory operations. This has resulted in an increase production of snowboards by 50%. What is the new maximum number of skis that can be produced per day?
- A drug company is deciding how much to invest in Research and Development into finding a cure stomach cancer. The table below shows the company’s demand for financial capital for R&D of this drug, based on its expected rates of return from selling the drug. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole. Estimated Rate of Return_____________________ Value of R&D Projects That Provide at Least This High a Private Rate of Return to the Drug Company (measured in millions of dollars) 10% $220 9% $228 8% $238 7% $250 6% $264 5% $280 4% $298 3% $308 If the opportunity cost of financial capital for the drug company falls from 7% to 5%, the drug company will invest more in R&D if it receives only the private benefits of this investment. Question 4…Suppose that you are trying to make a decision regarding the purchase of a new machine for the plant that you are working on. You have three criteria to consider. First of all, in these hard times, the price of the machine is very important for you. On the other hand, the throughput rate is also very important for you since you are anticipating higher demand in the future and you should have enough production to satisfy the customer demand. Finally, energy consumption is an issue that your company is sensitive to not only for the cost issues but also green production seems to be very important particularly for your customers. You have decided to adopt the additive utility function for the overall utility from these three criteria. Thus, the next thing for you is to determine the relative weights of the criteria. Suppose you used Swing Weighting and obtained the following table as the result of the process. What is the weight of the price?True or False? Always justify your answer, it is more important than getting It right If the marginal rate on return on capital increases, then investments become more costly for firms. The firms lower their amount of desired capital and this lead in equilibrium to lower investment.