.Give detailed explanation please.
2. (2 points) Rey buys only hamburgers and bottles of root beer out of a weekly income of 5100. He currently consumes 20 bottles of root beer per week, and his marginal utility of root beer is 6. The price of root beer is $2 per bottle. Currently, he also consumes 15 hamburgers per week, and his marginal utility of a hamburger is 8. Is Ray maximizing utility at his current consumption basket? If not, should he buy more hamburgers each week, or fewer? 3. (2 points) Helen's preferences over CDs (C) and sandwiches (S) are given by UIS, C) = SC+10(S+ C), withMUc=S+10 andMUs= (3+ 10. Ifthe price ofaCD is $9 and the price of a sandwich is $3, and Helen can spend a combined total of $30 each day on these goods, nd Helen's optimal consmrtption basket. 4. (8 points) Lou's preferences over pizza (x) and other goods 0;) are given by U(x, y) = xy, with associated marginal utilities MU: = y and m = x. a) Calculate his optimal basket as a function of Pi, Py and income. (2 points) b) When Py = 1, his income is $120, calculate his income and substitution effects of a decrease in the price offood l";r from $4 to $3. (2 points) c) When P, = 1, his incotne is $120, calculate the compensating variation of a decrease in the price of food P; from $4 to $3. (2 points) (1) WhenPy = 1, his income is $120, calculate the equivalent variation ofa decrease in the price of food P: from $4 to $3. (2 points) Please show work, thank you. 13:32 9 @ @ 1 45% Q5. For the production function, Q = 200K1/413/3 find the output when K= 16, L = 27 K = 10 000, L = 1000 Q6. Write down the values of x which satisfy each of the following equations: a 5* = 25 b. 3' = c. 2" = d. 100* = 10 e. 2' = 64 Q7. Solve the following equations: a. 23* =4 b. 4 x 2" = 32 C. 8* = 2x () Q8. Use the rules of logs to express each of the following as a single log: a log.(xy) - logsx - logy b. 3log x - 2logy c. logy + 5log x -2log;z Q9. Express the following in terms of logyx, logy and logsz: a. log,(x y z*) b. logs (,3) c. logs () Q10. Solve the following equations: a. 10(1.07)" = 2000 b. 10"-1 = 3 c. 5*-2 = 5 d. 2(7) 0) ( A > 0) G = G' (G > 0) X = X' ( x > 0 ) M = my + M' (0 0) where Xand Mdenote exports and imports respectively and mis the marginal propensity to import (a) Show that 1-atm (b) Write down the autonomous export multiplier ay ax and the marginal propensity to import multiplier ar Deduce the direction of change in /due to increases in x* and m.(a) Biden pic's finance director is evaluating a new four-year recovery project for Uncle Sam. You are a member of Biden pic' finance team and have been asked to find out the appropriate cost of capital figure for the company's project appraisal. Assume that the current date is 31 March 2021. the company's financial year end, and the corporation tax rate is 21%. The Balance Sheet of the company provides the following information: Ordinary shares (nominal value $1 each) E20,500,000 6% preference shares (nominal value $1 each) E4,300.000 4% irredeemable debentures (nominal value (100 each) $5,200,000 3% redeemable debentures" (nominal value [100 each) E6.500.000 *Redeemable with a 2% premium (i.e., 102% of nominal value) on 31 March 2024. The market values of the company's capital as of 31 March 2021 are as follows: Ordinary shares E3.11 per share (cum-dividend) 6% preference shares E1.20 per share (ex-dividend) 4% irredeemable debentures (105% (ex-interest) 3% redeemable debentures $101% (cum-interest) Biden pic's ordinary dividend for the year to 31 March 2021 totals $5,125,000 and this is due to be paid on 14 April 2021. Biden pic's ordinary dividends have been increasing at a steady annual rate since the year ended 31 March 2016 when they totalled $4,421,000. Biden pic's issued ordinary share capital has not changed since 2015. Required: Calculate Biden pic's existing Weighted Average Cost of Capital at 31 March 2021. (18 marks) (b) Convertible bonds had been reported as a popular type of financing in year 2020. particularly for firms badly hit by the coronavirus pandemic. Discuss the pros and cons of convertible bonds as a source of finance, especially in the face of greater uncertainty. (12 marks) (c) The directors of Joe pic are seeking to raise $5 million via a rights issue. The company currently has $5 million of issued share capital (nominal value $0.50 each), and the market price per share is currently $3 cum-rights. The directors are considering a rights issue subscription price of either $1 per share or $2 per share for new shares. Required: Calculate the theoretical ex-rights price per share if the rights issue subscription price is (i) 61 per share. (ii) E2 per share. (4 marks) (d) Explain why a rights issue generally results in a fall in the market price of shares.Part B (10points, questions 11 to 20) Listed in the table below are National Accounts data for a small country: S (billions) Consumption 400 Imports 10 Investment (gross) 40 Government purchases 100 Exports 20 Capital Consumption Allowance (CCA) 20 Statistical Discrepancy 5 Receipt of factor income from other countries 12 Payments of factor income to other countries 10 Answer the following questions (provide the correct values for each item) using data provided in the table above: 1 1. Net Exports = 12. Net Factor Income from Abroad = 13. GDP = 14. GNP = 15. NNP = 16. Consumption expenditure as a percentage of GDP = 17. Government expenditure as a percentage of GDP = Questions 18 to 20 use data in the table below: Year 1 Year 2 Price Quantity Price Quantity Oranges $5.00 100 $5.00 150 Pears $3.00 100 $4.00 75 Given the data in the table above representing the total output of a small country. Calculate Real GDP for Years 1 & 2 and the growth rate in Real GDP between the two years. Remember, use Year 2 as the base year
