You are considering two perpetuities which are identical in every way, except that perpetuity a will begin making annual payments of $p to you two years from today while the first $p payment for perpetuity b will occur one year from today. it must be true that the present value of perpetuity: a) a is greater than that of b by $p. b) b is greater than that of a by $p. c) b is equal to that of perpetuity a. d) a exceeds that of b by the pv of $p for one year. e) b exceeds that of a by the pv of $p for one year.

E) B exceeds that of A by the PV of $P for one year.

Explanation:

A begins in 2 years in the future, while B starts one year into the future:

B:

A:

The difference is this one year difference which, makes the return on A lower than B today. After the two years, past and both perpetuities begin, their value will be the same.

ool enjoy a dunc cap cp cap cap

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.