Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year's crop with him. Assume he produces 1,048 tons of almonds and his neighbor produces 762 tons of walnuts. If the market price of almonds is $101 per ton and the market price of walnuts is $118 per ton: a. Should he make the exchange? b. Does it matter whether he prefers almonds or walnuts? Why or why not?
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- Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year's crop with him. Assume he produces 1,047 tons of almonds and his neighbor produces 791 tons of walnuts. If the market price of almonds is $101 per ton and the market price of walnuts is $117 per ton: a. Should he make the exchange? b. Does it matter whether he prefers almonds or walnuts? Why or why not? a. Should he make the exchange? The market value of the almond crop is $_____. (Round to the nearest dollar.)Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year's crop with him. Assume he produces 1,043 tons of almonds and his neighbor produces 767 tons of walnuts. If the market price of almonds is $101 per ton and the market price of walnuts is $112 per ton: a. Should he make the exchange? b. Does it matter whether he prefers almonds or walnuts? Why or why not? a. Should he make the exchange? The market value of the almond crop is $ (Round to the nearest dollar.) The market value of the walnut crop is $ (Round to the nearest dollar.) So, should he make the exchange? (Select from the drop-down menu.) b. Does it matter whether he prefers almonds or walnuts? Why or why not? No. His preference is irrelevant to the value of the crops. Is the above statement true or false? (Select from the drop-down menu.)T grows beets in her own garden. Although T detests beets, she will be required torecognize income when:a. She harvests her beets.b. She consumes beets that she could have sold for $100.c. She sells beets for $100 to somebody who actually likes them.d. She exchanges $100 worth of beets for $100 worth of spinach grown by herneighbor.e. Both (c) and (d) are correct T (a cash method taxpayer) pays $250,000 for a house to be held as an investment (it isactually worth $300,000).a. In all cases, T would be required to recognize $50,000 as income in the year hebuys the house.b. T will never be required to recognize income until he disposes of the house inan arm’s length sale or exchange.c. If T acquired the house from a person who owes him $50,000 for services rendered,T would be required to recognize $50,000 as income in the year he buysit.d. (c) would be the correct answer only if T accepts the house in satisfaction of thedebt owed to him for services rendered.e. None of the above.
- Suppose that Alex's benefit to the game is $128. Suppose further that Alex already bought a ticket (price of $80). Finally, suppose his non-refundable ticket has no resale value. Suppose that Alex's boss is considering paying a raise to Alex if he goes to work. Which of the following is true? (select all that apply) If Alex receives a $80 raise, then he will be indifferent between going to work and going to the game. If Alex does not get a raise, then he will definitely go to the game. If Alex receives a $60 raise, then he will NOT go to the game. I Alex receives a $100 raise then he will NOT go to the game.MA1. Lance trades a refrigerator that he uses in his tavern for a freezer that Jane has in her basement. The fair market value of the refrigerator is $850, and Lance's adjusted basis is $125. The FMV of the freezer is $850, and Jane's adjusted basis is $175. Lance plans to use the freezer in his tavern. Assume that the exchange is like-kind. What is Lance's realized gain or loss? a. $850 b. $725 c. $0 d. $125Amy is trying to decide whether or not it would be beneficial to employ the services of a real estate broker in order to facilitate the sale of her home. She has estimated that the marketing costs and opportunity cost associated with time spent dealing with prospective buyers amounts to $5,000. If Amy were to sell the house on her own for $200,000, but a broker would have been able to negotiate a higher price of $208,556, what commission rate should Amy have been willing to accept from a real estate broker to make her indifferent between selling the house on her own and hiring a real estate broker? 2.4% ● 3.1% 5.0% 6.5%
- Alexandra and Beatrice are deciding where to live during college. Alexandra can live at her parents house which costs nothing and provides a value of $500 to her. Beartice can lease an apartment by herself providing a value of $1000 at the cost of $600. Alexandra and Beatrice can also live together which still costs $600 and provides $1000 of value to both. Beatrice already lives in the apartment, but to move in will cost Alexandra $100. A. Find the outside option value for each person Ex Ante B. What is the maximum total benefit generated by people working together? C. Find the nash bargaining payoff for each person. Ex Post Now assume that Alexandra has moved in and incurred the cost. Alexandra cannot live with her parents unless she moves back, costing another $100. D. Find the new outside option for each person. E. Find the new nash bargaining payoff for each person.Andy owns a Candy factory with noisy machines which disturb his neighbor Barb. Andy profits from running his noisy factory by ∏A =100,000. Producing candy without making noise would be costly for Andy – if Andy were forced to run his factory silently, the profits of the factory would fall by 60,000 so he would only make a profit of 40,000. Otherwise, Andy could just shut down his factory entirely and earn nothing. Barb gets a payoff of ∏B =70,000 from a quiet neighborhood. She will get a payoff of zero (∏B =0) if she has to endure Andy's noise. Barb could wear earplugs, but that discomfort and inconvenience would leave her with a payoff of only ∏B =20,000. Suppose Andy is now allowed to be noisy if he chooses, but Barb has a liability right to collect damages for any harms she bears from the noise. Note that if she has earplugs, she does not bear any harms from the noise, so she will only be paid if Andy operates noisily and she does not wear earplugs (she is not paid any damages for…The following is a classic distributive bargaining scenario, wherein each party is attempting to maximize their gains at the expense of the other. In this situation, Michelle is interested in purchasing a Toyota Highlander. Michelle has two dealerships to choose from (Toyota of Louisville and Green Tree Toyota). Although she has no desire to travel a long distance, there are dealerships in Cincinnati, Ohio and Indianapolis, Indiana that she could represent as alternatives as well. Michelle decides to visit Toyota of Louisville first and finds the vehicle she wants – a 2013 Toyota Highlander. The Manufacturer’s Suggested Retail Price (MSRP) for the vehicle is $29,865, while the factory invoice (the price paid by the dealership for the car) is $27,929. While Michelle only knows the MSRP for the vehicle, the dealer knows both the MSRP and the factory invoice price. Michelle has a trade-in, but she is unsure of whether or not to let the dealer know this, as she is unsure of what impact…
- The following is a classic distributive bargaining scenario, wherein each party is attempting to maximize their gains at the expense of the other. In this situation, Michelle is interested in purchasing a Toyota Highlander. Michelle has two dealerships to choose from (Toyota of Louisville and Green Tree Toyota). Although she has no desire to travel a long distance, there are dealerships in Cincinnati, Ohio and Indianapolis, Indiana that she could represent as alternatives as well. Michelle decides to visit Toyota of Louisville first and finds the vehicle she wants – a 2013 Toyota Highlander. The Manufacturer’s Suggested Retail Price (MSRP) for the vehicle is $29,865, while the factory invoice (the price paid by the dealership for the car) is $27,929. While Michelle only knows the MSRP for the vehicle, the dealer knows both the MSRP and the factory invoice price. Michelle has a trade-in, but she is unsure of whether or not to let the dealer know this, as she is unsure of what impact…The following is a classic distributive bargaining scenario, wherein each party is attempting to maximize their gains at the expense of the other. In this situation, Michelle is interested in purchasing a Toyota Highlander. Michelle has two dealerships to choose from (Toyota of Louisville and Green Tree Toyota). Although she has no desire to travel a long distance, there are dealerships in Cincinnati, Ohio and Indianapolis, Indiana that she could represent as alternatives as well. Michelle decides to visit Toyota of Louisville first and finds the vehicle she wants – a 2013 Toyota Highlander. The Manufacturer’s Suggested Retail Price (MSRP) for the vehicle is $29,865, while the factory invoice (the price paid by the dealership for the car) is $27,929. While Michelle only knows the MSRP for the vehicle, the dealer knows both the MSRP and the factory invoice price. Michelle has a trade-in, but she is unsure of whether or not to let the dealer know this, as she is unsure of what impact…An investor was afraid that he would become like King Lear in his retirement and beg hospitality from his children, so he purchased grain "tithes," or shares in farm output, for 460 pounds. The tithes paid him 61 pounds per year for 32 years. What interest rate did the he receive on this investment?