Your bank account consists of a checking and savings accounts. Assume your expenses and earnings can be described by a random walk with an equal probability to spend one dollar or to receive one dollar in your checking account at every time interval. You are charged $5 for any transaction from the checking account to the savings account and viceversa. Also, assume that the cost per unit of cash, per unit of time r of keeping cash on hand is equal to $0.1 dollars for any dollar on hand per time period. Determine: (A) The optimal values of the two thresholds s and S, i. e., the amount of cash in your checking account restored after each transaction, and the maximum amount of cash in your checking account, respectively.

Based on what you learned about time management which of these statements are true

Which statement or statements are implied by equilibrium conditions of the loanable funds market? a firm borrowing in the loanable funds market invests those funds with a higher expected return than any firm that is not borrowing. investment projects which use borrowed funds are guaranteed to be profitable even after paying interest expenses. the quantity of savings is maximized, thus the quantity of investment is maximized. a loan is made at the minimum interest rate of all current borrowing.

Susie buys two goods - rounds of golf and massages. suppose that the price of a round of golf is $20, and the price of a massage is $30. in a typical week susie will play two rounds of golf, getting 20 units of satisfaction from the second round. she normally buys three massages each week, with the third giving her 30 units of satisfaction. if she were to buy a fourth massage in a week, it would give her 20 units of satisfaction. if the price of massages is reduced to $15, which of the following outcomes might we expect to occur? a) susie would leave her consumption choices unchanged because of diminishing marginal utility in the consumption of massages. b) susie would buy more massages and more rounds of golf, as predicted by the substituion effect. c) susie would buy more massages and fewer rounds of golf, as predicted by the substitution effect. d) susie would buy more massage and fewer rounds of golf, as predicted by income effect.