Using the graph below, develop a two- to four-page response in APA format using the following four-question prompt: Question 1 What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years if the opportunity cost of using funds is 8%? Question 2 Suppose the supply function for product X is given by Qxs = −30 + 2Px − 4Pz. How much of product X is produced when Px = $600 and Pz = $60? How much of product X is produced when Px = $80 and Pz = $60? Suppose Pz = $60. Determine the supply function and inverse supply function for good X. Graph the inverse supply function. Question 3 Suppose the own price elasticity of demand for a good X is −5, its income elasticity is −1, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 3. Determine how much the consumption of this good will change if: The price of good X decreases by 6%. The price of good Y increases by 7%. Advertising decreases by 2%. Income increases by 3%. Question 4 A consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5. What is the price of good Y? What is the consumer’s income? At point A, how many units of good X does the consumer purchase? Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? Is the consumer positively or negatively affected by the price change?

Economics Prompt Questions Student’s Name Institution Course Instructor Date Economics Prompt Questions Question 1 What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years if the opportunity cost of using funds is 8%? In determining the amount of money that the asset would generate, we shall need to calculate the present value (PV) of the cashflows. PV shows the current value of all income generated by a certain investment in the future (Steffensen & Søe, 2023). The formula for calculating the present value of an annuity is In this formula, CF= the annual cash flow generated by the asset ($250,000) r= the discount rate (0.08) t= the number of time periods (5 years) The calculation of the present value for each year is as follows PV1 = 250,000/ (1+0.08)1 = 231,481.48 PV2 = 250,000/ (1+0.08)2 = 214,334.71 PV3 = 250,000/ (1+0.08)3 = 198,453.44 PV4 = 250,000/ (1+0.08)4 = 183,747.63 PV5 = 250,000/ (1+0.08)5 = 170.137.62 The summation of present values is as follows. PV total = 231,481.48 + 214,334.71 + 198,453.44 + 183,747.63 + 170.137.62 PV total = 998,154.88 (This is the total amount of money that would be paid). Question 2 Suppose the supply function of product X is given by Qxs = −30 + 2Px − 4Pz. How much of product X is produced when Px = $600 and Pz = $60? To determine how much of product X will be produced, we shall substitute the given prices (Px and Pz) into (Qxs=−30+2Px−4Pz​) Px = 600 Pz = 60 When these values (prices) are substituted into the supply function, the result is as follows Qxs​=−30+2(600) −4(60) Each term * 2 (600) = 1200 * 4 (60) = 240 Substitution of the results into the supply function Qxs=−30+1200−240 After simplifying, Qxs​=1200−240−30 Qxs​=930 Therefore, 930 units of product X are produced when ...