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Author Question: Capital rationing refers to A) setting a minimum acceptable rate of return for a capital outlay. ... (Read 91 times)

APUS57

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on: Jul 1, 2018
Capital rationing refers to
 
  A) setting a minimum acceptable rate of return for a capital outlay.
  B) selecting among profitable capital outlays when there are constraints on the funds available.
  C) determining the maximum price to pay for a capital product.
  D) None of the above

Question 2

Suppose 100 citizens each derive marginal benefit from submarines according to the function MB = 10 - Q. If subs cost 100 each to produce, what is the efficient quantity of submarines?
 
  What will be an ideal response?


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Athena23

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

The market demand is SMB = 1000 - 100Q. Setting this equal to the MC of 100 yields a quantity of 9. If the cost is shared equally, each citizen pays 1 for the ninth submarine, which they each value at 1.


APUS57

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Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

nanny

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Reply 3 on: Yesterday
Excellent

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