Tutor profile: Brandon L.
A firm produces pencils The pencil maker sells pencils for X and uses the money he receives to buy Goods and services at avg price P. How will the firm decide on how many pencils to make? Explain the outcomes and the assumptions needed.
There are 4 things that need to be identified. 1) His decision is based on what X is relative to P After that assumption is made then, 2) If X is constant relative to P, then the firm will make the same number of pencils every week 3) IF X is rising relative to P, then each pencil will buy relatively more Goods and Services, then implies that he'll make more pencils every week, as he will be making more money with his sales, thus allowing him to make more regular purchases. 4) Alternatively, if X is falling relative to P, the reverse will happen. Then the firm will be making less pencils than he would in the weeks prior as he'll have less goods & services.
Contracts that involve debt are extremely complicated and place substantial restrictions on the behavior of the borrower. Explain how moral hazard explains this fact/
Moral hazard needs to be explained with respect to the borrower, and then it must be explained as to why the contracts help prevent this type of moral hazard. Example answer below Moral hazard is when, in this case, a borrower is willing to do risky behavior after the transaction occurs. A lender does not like when this occurs as they only became aware after the fact the transaction occurs. The contracts are used to prevent this type of behavior from happening. The contract restricts the actions of the borrower, so the lender can be sure they have a higher probability of getting their money back.
The sum of three consecutive positive integers is 111. What are the three integers?
To first solve this, you must identify an equation that would meet the criteria of this equation. First since the integers are consecutive and positive, that rules out all negative numbers and the numbers are next to each other, with one number being the smallest and one being the largest. So the first lowest integer would be X and then the 2nd integer would be x+1 and the 3rd integer would be x+2. Using that you could combine the variables we created, so the equation would be x+ (x+1) + (x+2) = 111 Then we would combine like terms to get 3x+ 1 + 2 = 111 3x + 3 = 111 Then simplify and solve 3x = 108 x = 36
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