MGEB02H3 Lecture 8: Lecture 8.pdf
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The table below describes the total product of a firm. Fill in the missing values, a) - u), by calculating marginal product and average product.
1 | 2 | 3 | 4 |
Units of the variable resource (Capital) | Total Product (TP) | Marginal Product (MP) | Average Product (AP) |
0 | 0 | a | - |
1 | 1 | b | l |
2 | 3 | c | m |
3 | 6 | d | n |
4 | 10 | e | o |
5 | 15 | f | p |
6 | 18 | g | q |
7 | 20 | h | r |
8 | 19 | i | s |
9 | 17 | j | t |
10 | 13 | k |
u |
Refer to the table from above.
a. List the units of capital exhibit increasing marginal returns?
b. List the units of capital exhibit decreasing marginal returns?
c. List the units of capital exhibit negative marginal returns?
8. Describe how the total product and average product curves change as a firm moves from increasing to diminishing to negative marginal returns.
9. Does the law of diminishing returns mean that, as a firm hires additional workers, each of those workers is successively worse at doing their job? Why or why not?
What is the contribution to the asset base of the following items under the Basel III requirements?
Ā | Ā |
a) $10 million cash reserves | Ā |
b) $50 million 91-day US Treasury bills | Ā |
c) $25 million cash items in the process of collection | Ā |
d) $5 million UK Government bonds, OECD CRD rated 1. | Ā |
e) $5 million French short term government bonds, OECD CRD rated 2. | Ā |
f) $1 million general obligation bonds | Ā |
g) $40 million repurchase agreements (against U.S Treasuries) | Ā |
h) $2 million loans to a foreign bank, OECD rated 3. | Ā |
i) ) $500 million 1-4 family home mortgages, category 1, loan-to-value ratio 80% | Ā |
j) $10 million 1-4 family home mortgages, category 2, loan to value ratio 95% | Ā |
K) $5 million 1-4 family home mortgages, 100 days past due. | Ā |
L) $500 million commercial and industrial loans, AAA-rated. | Ā |
M) $500 million commercial and industrial loans, B- rated. | Ā |
N) $100,000 performance-related standby letters of credit to a municipality issuing general obligation bonds. | Ā |
P) $7 million commercial letters of credit to a foreign bank. OECD CRC rated 2. | Ā |
Q) $3 million five-year loan commitment to a foreign government, OECD CRC rated 1. | Ā |
R) $8 million bankers' acceptance conveyed to a U.S AA rated corporation. | Ā |
S) $17 million three year loan commitment to a private agent. | Ā |
t) $17 million three month loan commitment to a private agent. | Ā |
U) $30 million standby letter of credit to back an A-rated corporate issue of commercial paper. | Ā |
V) $4 million five-year interest rate swap with no current exposure. | Ā |
W) $6 million two-year currency swap with $500,000 current exposure. | Ā |