Please answer the following questions and give 3 examples for each that could be related to students or goods or services students consume. Once you have posted your replies you must then...

Please answer the following questions and give 3 examples for each that could be related to students or goods or services students consume. Once you have posted your replies you must then review/respond to 2 other students post.

1) With alternative policies like income subsidies and directed construction subsidies readily available, why do governments choice to use price floors and price ceilings instead?

2)

https://www.newsweek.com/coconut-crisis-solved-cloning-1447985(Links to an external site.)

A start up makeup company that sources coconut oil for their products is trying to determine if they should purchase future options tohedge(Links to an external site.)against price volatility. Using the article create a recommendation on which strategy they should you based on your prediction about where prices are heading.

Keep it simple :You do not need to be specific on hedging strategy details -no need for $ amounts or number of options or puts, forward contracts, etc, to purchase. Simply state if you think coconut oil prices are going to go up/down. You do not need to understand various hedging strategies types to answer this question . A simple " I think prices are going down so buy future contracts at ...... to hedge against an increase in prices- is good enough for this DB.

Be sure to include what events from article impact either the supply and/or demand curve and in what direction the curves will shift. Will one or both curves shift? Be sure to explain in most simplest of terms to your client who "hates math" and prefers brevity over long winded explanations.

In your analysis include 2 graphs -(if you are unfamiliar with graphs or would like a refresher please seeAppendix A(Links to an external site.))

1) Supply & Demand Graph showing price before and after the events from the article. Be sure to label everything - for example original Demand curve D and new Demand curve D1. Indicate on graph equilibrium before & after.

2) Over the past 4 years the company has experienced a 20% increase in revenues as listed below. Create a time series graph showing the data below and include your Year 5 prediction

Be as creative as you would like however you must keep the % change in revenue between +/-30% therefore you can't claim in Year 5 the company made 800 Million in Revenue because of you. Which would be over an 11,000% increase (know how to calculate a growth rate see appendix) Your prediction must be +/- 30% of 6.9 (Year 4 Revenue) and indicate your predicted growth rate in the table somewhere.As with all Econ problems use the assumption of Ceteris Paribus