1. Suppose a company is interested in undertaking an investment that incurs an immediate cost (when t=0) of 10 Euros and no benefits. In the second year (t=2), the company incurs a cost of 2 Euros and benefits worth 13 Euros. Assuming a discount rate of 4%, what is the net present value (NPV) of the project? Would it be wise to invest in the project (yes or no)?

According to the question, the arc elasticity of demand for a Prime membership is -0.75.

Arc elasticity is a measure of the percentage change in the quantity of a good or service demanded at the same time as a percentage change in the price of that good or service. It is often used to measure a consumer’s responsiveness to changes in prices.

Arc elasticity is calculated as the percentage change in quantity demanded (Q) divided by the percentage change in price (P). In this case, the percentage change in quantity is 15 million (77 million – 62 million) and the percentage change in price is 20% (from $99 to $119). Therefore, the arc elasticity of demand for a Prime membership is -0.75 (15 million / 20%). This indicates that demand for Prime is price inelastic, meaning that a price increase will cause a decrease in demand.

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The tier that is a part of internationalization is licensing franchises. Internationalization refers to the process of expanding business operations across international borders. Option (c)

This may involve a variety of strategies, such as exporting, direct investment, or licensing franchises. Licensing franchises is a strategy that involves granting the right to use a company's brand, products, or services to a third party in exchange for a fee or royalty.

This approach allows companies to expand into new markets without the need for significant capital investment or operational resources. It is a popular strategy for companies looking to quickly establish a presence in foreign markets and take advantage of local market knowledge and expertise.

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The debt-GDP ratio is the preferred measure of a country's debt because it takes into account the size of the country's economy. This means that a larger economy can handle a larger amount of debt than a smaller one. Therefore, the debt-GDP ratio provides a more accurate reflection of a country's ability to pay back its debt.

It is important for the government to keep this number under control because if the debt-GDP ratio becomes too high, it can lead to negative consequences for the economy. For example, investors may become less willing to lend to the country, leading to higher interest rates and lower investment. This can cause a decline in economic growth and potentially lead to a recession. Additionally, high levels of debt can limit the government's ability to respond to unexpected events, such as natural disasters or economic downturns. Therefore, it is important for the government to maintain a sustainable level of debt to ensure the long-term health of the economy.

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Norway has a mixed economy, which means it is a combination of a free-market economy and a welfare state. The government plays a significant role in regulating and supporting the economy, particularly in areas such as healthcare, education, and social welfare.

However, businesses are still allowed to operate independently and make their own decisions, and there is a high level of economic freedom. This system has led to a strong and stable economy with high levels of income equality, low unemployment rates, and a high standard of living for its citizens. Overall, the mixed economic system in Norway has proven to be successful in balancing economic growth with social welfare.

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Olivia's company sponsoring a contest as a way to attract consumers to its new line of athletic shoes is an example of sales promotion.

Sales promotion refers to short-term marketing activities that are designed to stimulate consumer demand and increase sales. Sales promotion activities may include contests, coupons, discounts, samples, or other incentives that encourage customers to try or purchase a product or service.

In Olivia's case, the contest is a sales promotion tactic aimed at increasing awareness and interest in the company's new line of athletic shoes. By offering the chance to win a prize or participate in an engaging activity, the company is hoping to attract customers who may not have otherwise considered purchasing the shoes.

Overall, sales promotion can be an effective tool for increasing short-term sales and generating interest in a product or service. However, it should be used in conjunction with other marketing strategies, such as advertising and public relations, to create a comprehensive and integrated marketing plan.

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Missteps and illegal questions can lead to lawsuits based on anti-discrimination laws. The correct answer is C.

It is essential to plan and prepare all interviewers for the interview process to ensure that they conduct the interview legally, fairly, and effectively. Missteps or illegal questions can lead to lawsuits based on anti-discrimination laws, which can damage the organization's reputation and result in costly legal fees.

Interviewers should be trained to ask only job-related questions and to avoid questions that could be interpreted as discriminatory or biased. They should also be aware of the legal framework governing the interview process and the rights of the applicants.

By planning and preparing all interviewers for the interview, organizations can help ensure that the process is conducted professionally, legally, and effectively, and that they select the most qualified candidate for the job.

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During the sales era, the characteristic management thinking was "If we can make it, it will sell." This reflects a production-oriented approach where the primary focus was on maximizing production efficiency and output.

The assumption was that if products were made efficiently and at a low cost, they would automatically sell in the marketplace.

Option (a) is, therefore, the correct answer.

Option (b) is more reflective of the marketing era that followed the sales era, where firms began to focus on customer needs and wants in order to win their loyalty.

Option (c) is also more reflective of the marketing era, where marketing activities were increasingly seen as a critical component of long-term strategic planning.

Option (d) reflects an earlier period in history where families were more self-sufficient and traded or sold their surplus output to local distributors.

Option (e) is not true as marketing activities were typically handled by separate departments during the sales era.

Hence, Option (a) is, therefore, the correct answer.

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Here is the complete question:

During the sales era,

a) characteristic management thinking was, "If we can make it, it will sell."

b) increased competition made firms focus on winning customers.

c) marketing people did both short-run and long-run marketing planning. d) families traded or sold their surplus output to local distributors.

e) all marketing activities were brought under the control of one department.

A food manufacturer is trying to maximize profit by selling wheat-based cereal (C) and wheat bread(B) with raw wheat (W). 3136 units of wheat should go to cereal W WC.

The production functions for cereal and bread are given as follows:

Cereal: [tex]C=21WC−1.5WC2[/tex]

Bread: [tex]B=782b–2Wb^2[/tex]

The constraint is given as:

WC+WB=6,272

The profit per box of cereal is $1.00 and per pack of wheat bread is $0.50

To maximize profit, we need to find out how much wheat should go to the cereal (W WC).

We can use the constraint equation to solve for WB:

WB= 6272 − WC

Substituting this into the profit equation for bread:

Profit= 0.5B

=0.5(782b–2Wb2)

=391b–Wb2

Now we can substitute WB into the constraint equation:

WC+ (6272−WC) = 6272

WC=3136

Substituting this value into the profit equation for cereal:

Profit= 1C

=1(21 WC−1.5 WC²)

=3136

Therefore, 3136 units of wheat should go to cereal (W WC).

Rounding this value to the nearest whole number gives us 3136.

Hence, 3136 units of wheat should go to cereal (W WC).

The technological link between the quantities of physical inputs and the quantities of output of commodities is known as a production function in economics.

The production function, a fundamental concept in standard neoclassical theories, is used to define marginal product and distinguish allocative efficiency, an important area of economics study.

One of the keys aims of the production function, as an engineer or professional manager could understand it, is to address allocative efficiency in the use of factor inputs in production and the subsequent distribution of money to those components.

This is accomplished by removing oneself from the technical difficulties of reaching technical efficiency.

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The answer is E. All of these choices. A strong problem statement is essential for the success of a Six Sigma project as it lays a stable foundation for the project and sets appropriate expectations for the organization's leadership.

A weak problem statement can result in the project being misguided or not achieving its goals, so it is critical to have a strong problem statement.It helps to ensure that the project is properly scoped and that the project team is focused on solving the right problem. A well-crafted problem statement also ensures that the project is aligned with the organization's strategic goals and objectives.Without a strong problem statement, a Six Sigma project may suffer from scope creep, lack of direction, and a lack of alignment with the organization's goals.

Therefore, a strong problem statement is crucial to the success of a Six Sigma project.

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The marketing metric that indicates the rate at which spending on marketing contributes to profits is called "return on marketing investment" (ROMI).

ROMI is a performance metric used to measure the financial return on marketing investments. It is calculated by dividing the incremental revenue generated by a marketing campaign by the cost of the campaign, and then expressing the result as a percentage. ROMI is used to evaluate the effectiveness of marketing campaigns and helps businesses to make informed decisions about future marketing investments.

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The neoclassical theory of regional growth emphasizes the role of market forces in shaping regional economic development.

According to this theory, regional growth is driven by the efficient allocation of resources, capital accumulation, and technological progress. The neoclassical model assumes that labor and capital are perfectly mobile and that markets operate without any frictions or barriers to entry. As a result, regions with abundant natural resources, skilled labor, and favorable business conditions will experience faster economic growth. In contrast, the Keynesian theory of regional growth emphasizes the role of government intervention in promoting economic development. According to this theory, regional growth is driven by the level of aggregate demand in the economy. The Keynesian model assumes that markets are not always efficient and that government policies can help to stimulate economic growth and reduce unemployment. Keynesians argue that government intervention, through public investment, subsidies, and tax incentives, can create jobs and promote economic growth in struggling regions. While neoclassical theory emphasizes the importance of market forces, Keynesian theory highlights the importance of government intervention in promoting regional growth. Both theories have their strengths and weaknesses, and many policymakers use a combination of both approaches to promote economic development. Ultimately, the choice between neoclassical and Keynesian policies will depend on the specific circumstances and needs of each region.

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The feedback about PR in this scenario is that it can be a powerful tool in shaping public opinion and driving political agendas. The example of Nayirah's speech shows how a well-crafted PR campaign can create a sense of urgency and inspire action from the public. However, it also highlights the potential dangers of using PR to spread false information and manipulate public sentiment.

It is concerning that false news and propaganda can have such a significant impact on public perception, especially when it comes to issues of war and conflict. As you mentioned, the media has a responsibility to report the truth, but in this case, it seems that they were complicit in spreading false information.

Overall, this situation highlights the importance of responsible PR practices and ethical reporting. While PR can be an effective tool for shaping public opinion, it is essential to ensure that the information being disseminated is accurate and truthful. As we navigate an increasingly complex media landscape, it is vital to remain vigilant and critical of the information we consume.

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The decision to keep the electoral college or move to direct election would depend on the values and priorities of the people who are rewriting the constitution.

The electoral college is a system that has been in place since the United States' founding, where the president is elected indirectly by electors who represent each state based on its population. The winner of the majority of electoral votes becomes the president.

On the other hand, direct election of the president means that the person who receives the most popular votes nationwide would become the president, without the need for electors.

If the constitution were to be rewritten today, whether to keep the electoral college or move to direct election would depend on the values and priorities of the people who write it.

Those who support the electoral college argue that it balances the power between small and large states and ensures that every state has a say in the election. They also argue that it provides stability and certainty by preventing challenges to election results in close races.

However, those who support direct election argue that it is more democratic because it gives equal weight to every individual vote, regardless of their location. They also argue that it would eliminate the possibility of electing a president who did not win the popular vote, as happened in the 2000 and 2016 elections.

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Creating an ethical culture within an organization is critical to ensuring that employees act in a responsible, fair, and honest manner.

There are several key components to creating such a culture, including being careful about pressure and signals, watching for the dangers of an unethical environment, and developing an ethics standard.

Being careful about pressure and signals involves creating an environment where employees do not feel unduly pressured to engage in unethical behavior.

This can include encouraging employees to report any potential violations of ethical standards, as well as ensuring that employees are not penalized for doing so.

Additionally, it is important to be aware of the signals that may be sent within the workplace, such as a lack of transparency or accountability, that can contribute to an unethical environment.
Watching for the dangers of an unethical environment involves identifying potential threats to the ethical culture within the organization.

This can include monitoring employee behavior, identifying potential conflicts of interest, and creating policies and procedures that help to ensure that ethical standards are upheld.
Developing an ethics standard is another important component of creating an ethical culture.

This involves creating a set of guidelines and principles that employees can refer to when making decisions, as well as providing training and education to ensure that employees understand these standards and are able to apply them in practice.
Overall, creating an ethical culture involves a commitment to integrity, transparency, and accountability.

By being vigilant about pressure and signals, watching for the dangers of an unethical environment, and developing an ethics standard, organizations can ensure that employees act in a responsible and ethical manner.

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The impact of residential electricity needs on the System Demand in Southern Africa is significant, as it contributes to the overall energy consumption in the region. Demand, in this context, refers to the amount of electricity required by consumers, including households, businesses, and industries. In the Southern African Development Community (SADC) countries, managing demand fluctuations is essential, particularly for those nations that import electricity in bulk.

Residential electricity needs contribute to peak demand periods, typically occurring in the morning and evening hours when households use appliances, lighting, and heating or cooling systems. High electricity demand can put pressure on the power grid, potentially leading to power outages, increased costs, and the need for additional power generation infrastructure.

To manage demand fluctuations, SADC countries that import electricity in bulk can implement various strategies, including:

1. Demand-side management: Encouraging consumers to use energy more efficiently, shift their usage to off-peak hours, or invest in energy-saving appliances to reduce overall electricity consumption.

2. Diversifying energy sources: By investing in renewable energy sources like solar, wind, or hydroelectric power, SADC countries can reduce their dependence on imported electricity and improve their energy security.

3. Energy storage systems: Using energy storage technologies, such as batteries, to store excess electricity during periods of low demand and release it during periods of high demand, helping to balance supply and demand.

4. Grid interconnection: Connecting national power grids within the SADC region can help balance electricity demand by allowing countries to share surplus energy and reduce the need for bulk electricity imports.

By implementing these strategies, SADC countries can better manage demand fluctuations, improve their energy security, and reduce the impact of residential electricity needs on System Demand in the region.

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The term for when a party to a contract performs his duties exactly according to the terms of the contract is called strict performance.

This means that the party has fulfilled all of its obligations as outlined in the contract, without any deviations or exceptions.

Strict performance is often required in contracts where there is a high level of importance or specificity, such as in real estate or construction contracts.

It is important to note that strict performance is different from substantial performance, which allows for minor deviations from the contract terms.

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Therefore, the  Nash equilibrium  of this game is (pa, pe) = ($23, $23), and the quantities produced by each firm at equilibrium are Qa = Qb = 53 units.

In this Bertrand price competition, Firm A and B both have marginal cost (MC) of 0 and capacity constraints of KA = 5 and K8 = 3 respectively. The market has an inverse demand function given by p = 24-Q, where Q = (a + 98).To find the Nash equilibrium, we need to first consider the possible strategies for both firms. Since undercutting the rival's price gives a firm all the market, each firm has an incentive to set their price just below their competitor's price. Thus, both firms will always charge the same price as each other.

Since the market demand is given by p = 24-Q, we can find the market quantity demanded at different price levels. For example, if both firms charge a price of $24, the total market quantity demanded would be Q = (a + 98) = (5 + 3 + 98) = 106. Since each firm has half the market share when they charge the same price as the other, each firm would produce Q/2 = 53 units.However, if one firm charges a lower price, say $23, then that firm would capture the entire market demand and produce 106 units, while the other firm would produce zero units. So, the dominant strategy for each firm is to charge a price of $23.

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The correct answer is C. financial goals, career, or marital status. Any major life changes such as getting married, changing careers, or adjusting financial goals can have an impact on your financial plan. It's important to regularly review and revise your plan as needed to ensure it aligns with your current situation and goals. Changes in book club membership or religious affiliation are unlikely to have a significant impact on your financial plan.
                     Financial distress happens when revenues or income no longer meet or pay for the financial obligations of an individual or organization. Financial distress is often a harbinger of bankruptcy and can cause lasting damage to one's creditworthiness. Changes in these areas can significantly impact your financial situation and require adjustments to your plan.

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The expected utility of the gamble is -8, Kala would not take this gamble and the negative risk premium implies that Kala is risk averse and would be willing to pay up to $72 to avoid taking the gamble.

The expected value of the gamble is:
E(w) = (0.75 x 4) + (0.25 x (-4)) = 3

So, the expected utility of the gamble can be found by plugging in the expected value into the utility function:

U(w) = 20(5 + 3) - (5 + 3)^2 = -8

Therefore, the expected utility of the gamble is -8.

To determine whether Kala would take this gamble, we need to compare the expected utility of the gamble with the expected utility of not taking the gamble. If the expected utility of the gamble is greater than the expected utility of not taking the gamble, then Kala would take the gamble.
The expected utility of not taking the gamble is simply the utility of her current income:

U(5) = 20(5) - (5)^2 = 75

Since the expected utility of not taking the gamble is greater than the expected utility of taking the gamble (-8), Kala would not take this gamble.

The risk premium is the amount of money that Kala would be willing to pay to avoid taking the gamble. It is equal to the expected value of the gamble minus the expected utility of not taking the gamble, or:
RP = E(w) - U(5) = 3 - 75 = -72

This negative risk premium implies that Kala is risk averse and would be willing to pay up to $72 to avoid taking the gamble.

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Rolex takes pride in emphasizing that it makes one of the most expensive watches you can buy, which is an example of the brand's commitment to producing high-quality, luxurious timepieces.

Rolex is a Swiss luxury watch brand founded in 1905 by Hans Wilsdorf and Alfred Davis. The company is headquartered in Geneva, Switzerland, and is known for its high-quality, expensive watches that are highly sought after by collectors and watch enthusiasts around the world. The term "ROLEX" represents a luxury brand that has become synonymous with prestige and high standards. Additionally, the term "PRIDE" reflects the company's confidence in its products and the value they offer to consumers. Lastly, the term "EXPENSIVE" underscores the fact that Rolex watches are not only well-crafted but also carry a significant price tag due to their high-quality materials and precision engineering.

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The economics debates that focus on the distribution of a nation's income are generally associated with the basic economic equation of "supply and demand".

Supply and demand are two fundamental concepts in economics that explain how the price and quantity of goods and services are determined in a market. This equation refers to the relationship between the quantity of a good or service that producers are willing to offer and the quantity that consumers are willing to buy. In debates about income distribution, economists analyze how changes in supply and demand affect the wages and salaries of workers, as well as the profits of businesses and the overall economic health of nations.

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Any point on the production possibilities curve illustrates a maximum production combination. The production possibilities curve represents the maximum output that an economy can produce with its available resources and technology.

The production possibilities curve (PPC) is a graphical representation of the maximum output that an economy can produce with its available resources and technology. The curve shows the different combinations of two goods that can be produced given the economy's resources and technology. Any point on the PPC represents a maximum production combination of the two goods. Points inside the curve are feasible but inefficient, while points outside the curve are unattainable with the current resources and technology. The slope of the PPC represents the opportunity cost of producing one good in terms of the other. Economic growth can be represented by an outward shift of the PPC, which occurs when an economy's resources or technology improves, allowing it to produce more output.

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Answer: The option A will be correct "increase in government spending"

Explanation:  if there is an increase in government spending then there will be an increase in expenditure in infrastructure, welfare etc. This will inturn increase the salary and money holding by the general public.

As a result there will be increase in money demand and increase in money supply.

To stabilize output by countering an increase in money demand by households, the Federal Reserve would basically decrease the money supply. The correct answer is option d.

It is seen that when households increase their demand for money, then they are essentially reducing their spending on various other goods and services. This can even lead to total decrease in output, as businesses may went on to reduce their production and employment in response to the decrease in demand.

To counteract this situation, the Federal Reserve actually decreases the money supply by reducing the amount of money that is in circulation. This can also be done by selling government securities, increasing the reserve requirement for all banks, or even increasing the discount rate at which banks may borrow from the Federal Reserve.

The step of reducing the money supply can cause increase in the interest rates, making borrowing more expensive for households and businesses, and therefore it went on to reduce their spending. This step  can help to stabilize all output by reducing the decrease in demand that is caused by households increasing their money holdings.

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The purchase by a foreign government of an airplane produced in the United States would be included in U.S. net exports.Option (d)

Net exports refer to the difference between the value of a country's exports and the value of its imports. When a foreign government purchases an airplane produced in the United States, it is considered an export, which increases U.S. net exports.

The other options, consumption expenditures, investment expenditures, and government purchases, are not applicable to this scenario because they refer to domestic economic activity within the United States. Net exports, on the other hand, account for international economic activity and reflect the impact of foreign trade on a country's economy.

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The difference between GDP and GNP is that GNP considers the production of both, produced domestically and abroad also, whereas GDP only considers produce within the countries border.

The Gross-Domestic-Product (GDP) and Gross-National-Product (GNP) are both measures of a country's economic performance, but they differ in their scope and calculation.

The "GDP" measures the total value of all goods and services produced within a country's borders, regardless of the nationality of the producer.

The "GNP" measures the total value of goods and services produced by the citizens and companies of a country, regardless of their location.

In other words, GNP takes into account the production of a country's citizens and companies both domestically and abroad, while GDP only measures domestic production.

As a result, GNP can be higher than GDP if a country has a large number of citizens and companies producing goods and services abroad.

Another difference between GDP and GNP is the way they account for international-trade. GDP includes exports of goods and services, but excludes imports, while GNP includes both exports and imports.

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The interest required to achieve the growth of the firm's output is 3.7% compounded annually.

To calculate the interest required to achieve the growth of the firm's output, we can use the formula for compound interest:

FV = PV x (1 + i)^n

Where FV is the future value, PV is the present value, i is the interest rate, and n is the number of compounding periods.

In this case, the present value (PV) is 50,000, the future value (FV) is 60,000, and the number of compounding periods (n) is 5 years. We need to solve for the interest rate (i).

Substituting the values into the formula, we get:

60,000 = 50,000 x (1 + i)^5

Dividing both sides by 50,000, we get:

1.2 = (1 + i)^5

Taking the fifth root of both sides, we get:

1 + i = 1.037

Subtracting 1 from both sides, we get:

i = 0.037 or 3.7%

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PV of $20,100 at 17% discount rate for 20 years is approx. $871.99 by formula & calculator; approx. $924 by Appendix B.

To calculate the present value of $20,100, discounted at 17 percent, we can use the formula:

PV = FV / (1 + r)ⁿ

Where:

PV = present value

FV = future value

r = discount rate

n = number of periods

In this case, FV is $20,100, r is 0.17 (17 percent), and n is 20 years.

Using the formula, we get:

PV = 20,100 / (1 + 0.17)²⁰

PV = 20,100 / 23.06

PV = $871.99 (rounded to the nearest cent)

Therefore, the present value of $20,100, discounted at 17 percent, is approximately $871.99.

To verify this answer using a financial calculator, we can use the present value (PV) function:

PV = -$20,100

n = 20

i = 17

PMT = 0

Using these inputs, we get a present value of $871.99, which matches our answer from the formula method.

Appendix B can also be used to approximate the present value. At a 17 percent discount rate, the present value factor for 20 years is approximately 0.046.

Multiplying $20,100 by 0.046 gives us approximately $924, which is a bit higher than our calculated answer. This is because the formula method is more precise and takes into account the compounding of interest over time.

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Yes, the overall demand for goods and services declines. In such a scenario, deflation is more probable, as lower demand leads to a decrease in prices to stimulate consumption.

If a country relies heavily on an exporting economy and exports decreased by 90%, then its GDP will definitely fall. This is because exports are one of the major contributors to a country's GDP. When exports decrease, the country's overall production and income reduce, leading to a fall in GDP.

Regarding inflation or deflation, it depends on how the government and central bank respond to the situation. If they try to stimulate the economy by injecting more money into the system, it can lead to inflation. However, if they try to control the money supply and keep it low, it can lead to deflation. Ultimately, the government's policies will determine whether there will be inflation or deflation in the country.

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The summer peak season and the profit-maximizing price in both seasons is $100.

To determine which season is peak season, we need to compare the demand in summer [tex](PS = 200 - 2QS)[/tex] to the demand in winter [tex](PW = 200 - QW)[/tex]. We can calculate the quantity demanded in each season by setting the price equal to the respective inverse demand equation and solving for Q.

For summer:

[tex]PS = 200 - 2QS[/tex]

[tex]QS = (200 - PS)/2[/tex]

For winter:

[tex]PW = 200 - QW[/tex]

[tex]QW = 200 - PW[/tex]

We can see that the quantity demanded in summer is twice as sensitive to changes in price compared to the quantity demanded in winter. This means that summer is the peak season, as small changes in price have a bigger impact on demand compared to winter.

To determine the profit-maximizing prices in both seasons, we need to find the quantity that maximizes profit in each season, given the total number of yachts available (75).

In summer, the profit function is:

[tex]πS = (PS - 0)QS = (200 - 2QS)QS = 200QS - 2QS^2[/tex]

Taking the derivative of πS with respect to QS and setting it equal to zero to find the profit-maximizing quantity, we get:

[tex]dπS/dQS = 200 - 4QS = 0[/tex]

[tex]QS = 50[/tex]

Substituting [tex]QS[/tex] = 50 into the inverse demand equation for summer, we get:

[tex]PS = 200 - 2QS = 100[/tex]

Therefore, the profit-maximizing price in summer is $100.

In winter, the profit function is:

[tex]πW = (PW - 0)QW = (200 - QW)QW = 200QW - QW^2[/tex]

Taking the derivative of πW with respect to QW and setting it equal to zero to find the profit-maximizing quantity, we get:

[tex]dπW/dQW = 200 - 2QW = 0[/tex]

[tex]QW = 100[/tex]

Substituting [tex]QW = 100[/tex] into the inverse demand equation for winter, we get:

[tex]PW = 200 - QW = 100[/tex]

Therefore, the profit-maximizing price in winter is $100.

In summary, summer is the peak season and the profit-maximizing price in both seasons is $100.

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If good X and good Y are substitutes in production and independent in consumption, a decrease in the price of good X will lead to an increase in the quantity demanded of good X and a decrease in the quantity supplied of good Y.

As a result, the equilibrium quantity of good Y will decrease, and the equilibrium price of good Y will increase ceteris paribus. Therefore, option b. supply of good Y will decrease; decrease: increase, is the correct answer. This is because the decrease in the price of good X will lead to an increase in the demand for good X, which will increase its production and decrease the production of good Y. This decrease in the production of good Y will lead to a decrease in the quantity supplied of good Y, resulting in an increase in its equilibrium price. Overall, the decrease in the price of good X will have a negative impact on the equilibrium of good Y, leading to a decrease in its quantity supplied and an increase in its equilibrium price.

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