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The_Timepasser
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#2001
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#2001
(Original post by alex_hk90)
Surely it's just (£23,000)*(1.04^10)?
(Original post by London Prophet)
.

Sorry to bother u lol but this one's harder...the second part.

Phil and Susie just got married and received £30,000 in cash gifts for their grand
wedding. If they place half of this money in a fixed rate investment earning 12%
compounded annually, how much will they have on their twenty-fifth anniversary?
Would the future value be larger or smaller if the compounding period was 6 months
(interests are compounding every 6 months instead of annually)? How much more or
less would they have earned with this shorter compounding period?
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damos92
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#2002
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#2002
Why have economists coined terms such as 'merit' and 'demerit' goods and thus made a generalisation about every consumer of these goods?

Yes, some people will not be fully aware of the benefits of certain things, but those who took the liberty to find out will and so i'm going to struggle to use these two terms in my forthcoming exam, because i don't agree with them at all.
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London Prophet
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#2003
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#2003
(Original post by damos92)
Why have economists coined terms such as 'merit' and 'demerit' goods and thus made a generalisation about every consumer of these goods?

Yes, some people will not be fully aware of the benefits of certain things, but those who took the liberty to find out will and so i'm going to struggle to use these two terms in my forthcoming exam, because i don't agree with them at all.
I don't follow your objection.

Merit Good = has social benefits above and beyond the private benefits
Demerit Good = has social costs above and beyond the private costs

It makes little generalisation about the consumer.
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London Prophet
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#2004
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#2004
(Original post by The_Timepasser)
Sorry to bother u lol but this one's harder...the second part.

Phil and Susie just got married and received £30,000 in cash gifts for their grand
wedding. If they place half of this money in a fixed rate investment earning 12%
compounded annually, how much will they have on their twenty-fifth anniversary?
Would the future value be larger or smaller if the compounding period was 6 months
(interests are compounding every 6 months instead of annually)? How much more or
less would they have earned with this shorter compounding period?
I'll give you a clue. If it's 12% annually compounded every 6 months then you're calculating a 6% compound increase every month - you can work out the rest.
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alex_hk90
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#2005
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#2005
(Original post by London Prophet)
I'll give you a clue. If it's 12% annually compounded every 6 months then you're calculating a 6% compound increase every month - you can work out the rest.
I think you mean "every 6 months". And it's exactly the same principle as the annual case.
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damos92
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#2006
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#2006
(Original post by London Prophet)
I don't follow your objection.

Merit Good = has social benefits above and beyond the private benefits
Demerit Good = has social costs above and beyond the private costs

It makes little generalisation about the consumer.
I was taught today that Merit goods are goods, such as Education, in which the receiver isn't truly aware of the full long term benefits their consumption of the good will offer.

Conversely, i was taught that Demerit goods are goods, such as cigarettes, which do more damage than people realise.

I've unfortunately lost my voice at the moment so i couldn't say anything, but i was sort of thinking 'wth' when my lecturer was saying all this stuff.

It just got me thinking that economists assume that most, if not all consumers are ignorant and uneducated. I guess i was mistaken, ironically through the education i received today.
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kubur
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#2007
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#2007
Hi i have a question and i didn' understand how can i solve it.

Jim's utility function is U(x;y)=xy.Jerry's utility function is U(x;y)=1000xy+2000.Tammy's utility function is U(x;y)=xy(1-xy).Oral's utility function is U(x;y)=-1/(10+2xy).Marjoe's utility function is U(x;y)=x(y+1000).Pat's utility function is U(x;y)=0.5xy-10000.Billy's utility function is U(x;y)=x/y.Francis's utility function is U=-xy.

a)Who had the same preferences as Jim?
b)Who had the same indifference curves as Jim?
c)Explain why the answer to (a) and (b) differ.
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alex_hk90
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#2008
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#2008
(Original post by kubur)
Hi i have a question and i didn' understand how can i solve it.

Jim's utility function is U(x;y)=xy.Jerry's utility function is U(x;y)=1000xy+2000.Tammy's utility function is U(x;y)=xy(1-xy).Oral's utility function is U(x;y)=-1/(10+2xy).Marjoe's utility function is U(x;y)=x(y+1000).Pat's utility function is U(x;y)=0.5xy-10000.Billy's utility function is U(x;y)=x/y.Francis's utility function is U=-xy.

a)Who had the same preferences as Jim?
b)Who had the same indifference curves as Jim?
c)Explain why the answer to (a) and (b) differ.
How far have you got with it? At first glance I guess it's looking at monotonic (increasing) transformations.
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kubur
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#2009
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#2009
(Original post by alex_hk90)
How far have you got with it? At first glance I guess it's looking at monotonic (increasing) transformations.
My friend said that Jerry,Pat,Oral,Tammy,Francis have the same preferences as Jim.And Jerry,Pat and Oral have the same indifference curves as Jim.But my friend didn't explain how can i solve it.i know, utility function represent the preferences but how can we understand that we have the same preferences with the other or not by looking at he utility function.
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mir3a
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#2010
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#2010
Do rising student fees make economic sense?
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alex_hk90
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#2011
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#2011
(Original post by kubur)
My friend said that Jerry,Pat,Oral,Tammy,Francis have the same preferences as Jim.And Jerry,Pat and Oral have the same indifference curves as Jim.But my friend didn't explain how can i solve it.i know, utility function represent the preferences but how can we understand that we have the same preferences with the other or not by looking at he utility function.
Well, do you understand that utility functions are ordinal, not cardinal, and so equivalent to increasing monotonic transformations? That would be where I start with this. I'm not sure why equivalent utility functions would have different indifference curves, but I haven't done consumer theory for a couple of years now so hopefully someone else can help you with that.

(Original post by mir3a)
Do rising student fees make economic sense?
Yes.
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Cggh90
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#2012
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#2012
Cost function


Jacob's short run production functions can be summarised:

If Jacob works L hours per day, then he is able to produce 0.3L kilograms of fish, as long as L is up to 15. Jacob may mork more than 15 hours, but due to darkness and mist, he cannot increase the catch any more

Q ) Can Jacob produce more than 4.5kilograms of fish?

No, maxium is 0.3 x 15 = 4.5

Q) Bananas are used as currency in this little economy. The daily rental price of fishing net is 100 bananas; one hour of labour somewhere else could bring Jacob 30 bananas. What is the total short run cost function of Jacob's business, for every level of fish output, q. Work out C(q)


I can't do this. I know that fixed costs are 100 (the fishing net). I can't seem to figure out the variable costs...
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yoyo462001
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#2013
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#2013
(Original post by mir3a)
Do rising student fees make economic sense?
Believe me you don't want to pay market prices for a degree.
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mir3a
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#2014
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#2014
(Original post by yoyo462001)
Believe me you don't want to pay market prices for a degree.
What exactly do you mean?
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yoyo462001
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#2015
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#2015
(Original post by mir3a)
What exactly do you mean?
The price of most degrees are seriously under what the market would value them. If you let market forces choose price I'd imagine every degree would go up in price.
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narc
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#2016
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#2016
A few questions about measuring income inequality:
i need to calculate a gini coefficient, but not the way of using the area under the graph but i don't know what the formula is...
what is the formula for the log variance measure of inequality?

thank you!
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AG27
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#2017
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#2017
Can someone please explain to me how the gold standard works?
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SPMS
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#2018
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#2018
Can you please check I am right?

* Perfectly competitive.
* Market price = £15
* Maximises profit at 1500
* Average total cost = £21
* Minimum Average Variable Cost = £12
* Minimum Average Total cost = £18.

Now the question asks for a short run profit, and I have graphed it out but have come out with.

1) Total Revenue = 15*1500 = 22500
2) Total Cost = 18*1500 = 27000
3) Hence Profit = negative £4500.

Help please?

Also where long term marginal cost = long term average cost this then shall be equal to price P1? Any output above this then results in the price increasing and hence then new firms will want to enter, if the price is below P1 then firms will want to exit the market?
I am guessing as there appears to be losses that firms will want to exit the industry.

Then the price shall become £18 in the long run, and the economic profit shall become normal?
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lesbianvampirekiller
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#2019
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#2019
I have a question about international economics and the IMF

Everybody says that if a country defaults on their sovereign debt they are blacklisted from the international markets - yet spain has done so, and Argentina was back in a matter of months... is it really as serious as people suggest?
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Noble
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#2020
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#2020
# Markets with high exit barriers are unstable and not self-regulated, so the profit margins fluctuate very much over time.
# Markets with a low exit barrier are stable and self-regulated, so the profit margins do not fluctuate much over time.

Can anyone please explain these two points.
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