« previous next »

Author Question: By the year 2025 the percentage of elderly in the U.S. should constitute nearly 10 of the ... (Read 55 times)

sdfghj

  • Hero Member
  • *****
  • Posts: 552
on: Jul 1, 2018
By the year 2025 the percentage of elderly in the U.S. should constitute nearly 10 of the population.
 
  Indicate whether the statement is true or false

Question 2

Your aunt owns a gold mine. The marginal extraction cost of gold is 25 and remains constant over time. The current market price of a unit of gold is 200. Your aunt's appropriate discount rate is 12.
 
  Next year, your aunt expects the price of a unit of gold to be 222. Should your aunt extract any gold from the mine this year?


Anonymous

  • Sr. Member
  • ****
  • Posts: 317
Reply #1 on: Jul 1, 2018
Answer to Question 1

F

Answer to Question 2

No, she should not extract and sell any gold currently. This is because the return on the gold left in the mine exceeds her discount rate. That is,
(Pt+1 - c) > (1 + r)( Pt - c)  (222 - 25 ) > (1.12 )(200 - 25 ).


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

There can actually be a 25-hour time difference between certain locations in the world. The International Date Line passes between the islands of Samoa and American Samoa. It is not a straight line, but "zig-zags" around various island chains. Therefore, Samoa and nearby islands have one date, while American Samoa and nearby islands are one day behind. Daylight saving time is used in some islands, but not in others—further shifting the hours out of sync with natural time.

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

Did you know?

Every 10 seconds, a person in the United States goes to the emergency room complaining of head pain. About 1.2 million visits are for acute migraine attacks.

Rule of Nines. A method for determining percentage of body burned. Each different colored section re Rule of Nines. A method for determining percentage of body burned. Each different colored section re
(A) A 62-year-old patient with myxedema exhibiting marked edema of the face and a somnolent look. Th (A) A 62-year-old patient with myxedema exhibiting marked edema of the face and a somnolent look. Th
Percentage of Foreign-Born Whites and Native Whites of Foreign or Mixed Parentage in Total Populatio Percentage of Foreign-Born Whites and Native Whites of Foreign or Mixed Parentage in Total Populatio
The percentage of women over 40 in the United States who are childless has almost doubled in the ... The percentage of women over 40 in the United States who are childless has almost doubled in the ...
The hatred and vengeance of adults become the children’s heritage. The headband of this 4-year-old ... The hatred and vengeance of adults become the children’s heritage. The headband of this 4-year-old ...
A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ... A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ...
Video: Polysaccharides

For a complete list of videos, visit our video library