Juan is always researching different investment options. a few weeks ago he noticed some nice homes for sale in his neighborhood. the listed prices were below market value. today on the news he heard that the federal reserve lowered interest rates for banks and that banks have lowered interest rates for home mortgages in turn. as a result, there has been a huge boom in the number of people purchasing homes. what is most likely to happen as a result of the change in interest rates? housing prices will go up and down due to changing fiscal policy. the market will experience more demand and the price of houses will go up. the price of houses will go down in response to the decreased demand. the prices for homes in that area will be stable due to the new monetary policy.

Cadbury has a chocolate factory in dunedin, new zealand. for easter, it makes two kinds of “easter eggs”: milk chocolate and dark chocolate. it cycles between producing milk and dark chocolate eggs. the table below provides data on these two products. demand (lbs per hour) milk: 500 dark: 200 switchover time (minutes) milk: 60 dark: 30 production rate per hour milk: 800 dark: 800 for example, it takes 30 minutes to switch production from milk to dark chocolate. demand for milk chocolate is higher (500lbs per hour versus 200 lbs per hour), but the line produces them at the same rate (when operating): 800 lbs per hour. a : suppose cadbury produces 2,334lbs milk chocolate and 1,652 lbs of dark chocolate in each cycle. what would be the maximum inventory (lbs) of milk chocolate? b : how many lbs of milk and dark chocolate should be produced with each cycle so as to satisfy demand while minimizing inventory?