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olga nikolaevna [1]
2 years ago
13

Consumers know that some fraction x of all new cars produced and sold in the market are defective. The defective ones cannot be

identified except by those who own them. Cars do not depreciate with use. Consumers are risk-neutral and value nondefective cars at $10,000 each. New cars sell for $8,000 and used ones for $2,000. (Note that since buyers are risk-neutral, the price of a new car reflects the expected value of purchasing a car that may or may not be defective.) What is the fraction x?
Business
1 answer:
frez [133]2 years ago
3 0

Answer:

x=0.25

Explanation:

Assuming that consumers value every non-defective car at $10,000 each, only defective used cars are for sale. Therefore, consumers value defective cars at $2,000.

The expected value of a new car is given by the defective new car rate (x) multiplied the defective value, added to the non-defective car rate (1-x) multiplied by the non-defective car value.

EV = 8,000= 2,000x + 10,000(1-x)\\x=\frac{2,000}{8,0000}\\ x=0.25

The fraction x is 0.25. That is, 25% of new cars sold are defective.

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Measures defined by management and used to internally evaluate the success of a​ firm's financial, business​ process, customer,
ladessa [460]

Complete Question:

Measures defined by management and used to internally evaluate the success of a firm's financial, business process, customer, and learning and growth are called

A. parameters.

B. the balanced scorecard method.

C. BPM.

D. KPIs.

E. benchmarks.

Answer:

D. KPIs.

Explanation:

Measures defined by management and used to internally evaluate the success of a​ firm's financial, business​ process, customer, and learning and growth are​ called KPIs.

KPIs is simply an acronym for key performance indicators.

4 0
2 years ago
Adam and barb go to the store to purchase some lottery tickets. without looking at the price, adam says "i’ll take 10 lottery ti
Shtirlitz [24]

Answer:

Price elasticity of demand for Adam=0

Price elasticity of demand for Barb=1

Explanation:

Price elasticity of demand = %age change in demanded QTY / %age change in demanded price

The price is not important for Adam, and he demands a fixed quantity, hence his demand curve is vertical. A perfectly vertical demand curve is can inelastic demand curve and has price elasticity =0

The quantity is not important for Barb, and he demands a fixed price, hence his demand curve is horizontal. A perfectly horizontal demand curve is has price elasticity =1

6 0
3 years ago
The gross pay, benefits and job expenses for two different employees are shown below. Employee A: gross pay $57,200, employee be
Lemur [1.5K]

Answer:

a. The total employment compensations for the two employees are the same

Explanation:

Employee compensation refers to payment made to employees by an organization in consideration for the services rendered.

Employee compensation can be in cash form such as salary and wages, perquisites, allowances, incentives, commission, etc.

In the given case,

<u>Compensation for Employee A</u>:

= Gross Pay + Employee benefits - Job expenses

= $57200 + 5300 - 800

=  $ 61,700    

Similarly,

Compensation for Employee B:

= Gross Pay + Employee benefits - Job expenses

= $56,900 + $6200 - $ 1400

= $61,700

Thus, employment compensation for both A and B are the same.

4 0
2 years ago
Thom owes $7,400 on his credit card. The credit card carries an APR of 18.5 percent compounded monthly. If Thom makes monthly pa
slavikrds [6]

Answer:

it will take 44.79 months for him to pay off the credit card assuming that he makes no additional charges

Explanation:

NPER(18.5%/12,-230,7400)=44.79 months

3 0
2 years ago
Ethan is planning for his retirement. He has narrowed it down to two investment options. The first is an IRA where monthly payme
-BARSIC- [3]

Answer:Accept Option B

Explanation: The concept of Future Value helps to to critically analyze investment opportunities so you can make decisions among options amd most importantly pick the project that yields the highest return.

The Future value of project A after discounting is $881.4 and for project B is $10,487.8

This is because of the difference in the amount invested.

The difference in return is $10,487.8-$881.4 = $9,606.4

7 0
2 years ago
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