Q.1 Q=100-4P, -3P, +2P, +0.001M, M being the income of the consumer while x,y,z are three different goods. Given are the values: P, = 21, Py = 8, P, = 9, M = 55000. Calculate the following: a. Own price elasticity b. Cross price elasticity with the other two goods. Comment on substitutes/complement goods e. Income elasticity. Comment on the type of goods. d. Determine the effect on Qy of a 10% increase in the price of other two goods. [15 Marks] CO1 & 3
Answers
a. Own price elasticity (Ep) ≈ -5.25
b. Cross price elasticity with the other two goods (Epy and Epz) can be calculated using the respective formulas provided.
c. Income elasticity (Ei) ≈ 0
d. The effect on Qy of a 10% increase in the price of the other two goods is a decrease from 68 to 7.6.
To calculate the different elasticities and determine the effect on Qy, let's go through each calculation step by step:
Q = 100 - 4P
Py = 8
Px = 21
Pz = 9
M = 55000
a. Own price elasticity (Ep) measures the responsiveness of the quantity demanded to a change in price.
Ep = (% change in quantity demanded) / (% change in price)
First, we need to calculate the initial quantity demanded (Q) at the given price (P):
Q = 100 - 4P
Q = 100 - 4 * 21
Q = 100 - 84
Q = 16
Now, let's calculate the new quantity demanded when the price (P) changes by 1 unit:
New P = P + 1 = 21 + 1 = 22
New Q = 100 - 4 * 22
New Q = 100 - 88
New Q = 12
Now we can calculate the percentage change in quantity demanded and the percentage change in price:
% change in quantity demanded = (New Q - Q) / Q = (12 - 16) / 16 = -0.25
% change in price = (New P - P) / P = (22 - 21) / 21 = 0.0476
Now we can calculate the own price elasticity (Ep):
Ep = (% change in quantity demanded) / (% change in price) = -0.25 / 0.0476 ≈ -5.25
b. Cross price elasticity measures the responsiveness of the quantity demanded of one good to a change in the price of another good.
Cross price elasticity (Epy) between good y and good x:
Epy = (% change in quantity demanded of y) / (% change in price of x)
First, we need to calculate the initial quantity demanded of y (Qy) at the given price of y (Py):
Qy = 100 - 4Py
Qy = 100 - 4 * 8
Qy = 100 - 32
Qy = 68
Now, let's calculate the new quantity demanded of y when the price of x (Px) changes by 1 unit:
New Px = Px + 1 = 21 + 1 = 22
New Qy = 100 - 4 * 22
New Qy = 100 - 88
New Qy = 12
Now we can calculate the percentage change in quantity demanded of y and the percentage change in price of x:
% change in quantity demanded of y = (New Qy - Qy) / Qy = (12 - 68) / 68 ≈ -0.8235
% change in price of x = (New Px - Px) / Px = (22 - 21) / 21 = 0.0476
Now we can calculate the cross price elasticity (Epy):
Epy = (% change in quantity demanded of y) / (% change in price of x) ≈ -0.8235 / 0.0476 ≈ -17.27
Similarly, you can calculate the cross price elasticity (Epz) between good z and good x.
If the cross price elasticity (Epy or Epz) is positive, it indicates that goods y and z are substitutes. If it is negative, it indicates that goods y and z are complements.
c. Income elasticity measures the responsiveness of the quantity demanded to a change in income.
Income elasticity (Ei) = (% change in quantity demanded) / (% change in income)
First, we need to calculate the initial quantity demanded (Q) at the given income (M):
Q = 100 - 4P
Q = 100 - 4 * 21
Q = 100 - 84
Q = 16
Now, let's calculate the new quantity demanded when the income (M) changes by 1 unit:
New M = M + 1 = 55000 + 1 = 55001
New Q = 100 - 4 * 21
New Q = 100 - 84
New Q = 16
Now we can calculate the percentage change in quantity demanded and the percentage change in income:
% change in quantity demanded = (New Q - Q) / Q = (16 - 16) / 16 = 0
% change in income = (New M - M) / M = (55001 - 55000) / 55000 = 0.0000182
Now we can calculate the income elasticity (Ei):
Ei = (% change in quantity demanded) / (% change in income) = 0 / 0.0000182 ≈ 0
If the income elasticity (Ei) is positive, it indicates that the good is a normal good (as income increases, the quantity demanded increases). If it is negative, it indicates an inferior good (as income increases, the quantity demanded decreases). If it is close to zero, it indicates a necessity or a relatively income-inelastic good.
d. Effect on Qy of a 10% increase in the price of the other two goods:
To determine the effect on Qy, we need to calculate the new quantity demanded of y when the price of x and z increases by 10%.
New Px = Px + 0.10 * Px = 21 + 0.10 * 21 = 23.1
New Pz = Pz + 0.10 * Pz = 9 + 0.10 * 9 = 9.9
New Qy = 100 - 4 * 21
New Qy = 100 - 4 * 23.1
New Qy = 100 - 92.4
New Qy = 7.6
The effect on Qy of a 10% increase in the price of the other two goods is a decrease from 68 to 7.6.
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Related Questions
which of the following illustrates media influence through a two-step flow of communication? group of answer choices a domestic car manufacturer sponsors a television program based on the defectiveness of imports. a man buys a new laundry detergent after having it recommended by a friend who had read that it was both effective and environmentally safe in a consumer magazine. a candidate for political office answers questions from the members of a studio audience on live television. a teenager buys a video game that she has seen being advertised both on television and in her favorite magazine.
Answers
In a two-step flow of communication, the man purchasing new laundry detergent on the advice of a friend who had read about it in a consumer magazine serves as an example of media impact.
Which two characteristics of the audience are persuasive?Attention (Albarracin & Wyer, 2001; Festinger & Maccoby, 1964), intelligence, self-esteem (Rhodes & Wood, 1992), and age are characteristics of the audience that influence persuasion (Krosnick & Alwin, 1989). Audience members must be attentive in order to be persuaded.
What are the two persuasion models?The elaboration likelihood model and the heuristic systematic model are the two most well-known dual process models. They both contend that there are two main ways that people receive information while trying to persuade them.
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Drag the tiles to the correct boxes to complete the pairs.
Match the different resources to the scenarios where they are used.
natural resources
human resources
man-made resources
entrepreneurship
A power plant uses an Industrialdesign power generator to generate large-scale
electricity for the neighborhood.
A power plant uses coal to heat water and then converts it into steam, which
then turns the turbines.
>
A power plant is set up by a group of industrialists as they come together to
solve the power crisis in their nelghborhood.
A power plant employs local workers who work in shifts to keep the plant
running for most of the day.
Answers
Answer:
1. Man-made
2. natural resources
3. entrepreneurship
4. Human resources
Explanation:
Natural resources are those which are present in the environment and are limited in number.
The man-made resources are those where a power generator is used to initiate the electricity on large scale.The natural resources are those where the water is heated from coal and then converting it to steam for running the turbines.The entrepreneurship is represented when the industrialists come together to solve the power crisis of their own neighborhood.The human resources are those where the workers are working in shifts to keep their plants in running condition.Therefore, the given resources are matched with the scenarios in which they are used.
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Cash-and-carry wholesalers refer to the wholesalers who carry a limited line of fast-moving goods and sell to ____
Answers
Cash-and-carry wholesalers refer to the wholesalers who carry a limited line of fast-moving goods and sell them to retailers, professional users, and institutional buyers.
Traditional wholesalers are different from cash-and-carry wholesalers in a number of ways. First of all, they only stock a small selection of goods, most of which are in great demand and move quickly, such as groceries, snacks, and drinks. Second, they don't provide credit or payment terms; instead, they demand that clients pay with cash or credit at the time of purchase. Finally, since they don't offer delivery services, clients are required to convey the goods themselves.
In the supply chain, cash-and-carry wholesalers are crucial, especially for small enterprises and independent merchants that might lack the purchasing power to deal with larger wholesalers. Cash-and-carry wholesalers assist these firms to compete with larger retailers and maintain their competitiveness in their marketplaces by providing low prices and a simple shopping experience.
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Which method of corporate finance is predominately used by "GROWTH companies"?
A-retained earnings
B-new stock issues
C-borrowing
D-none of these are used by “growth companies"
Answers
Answer:
The method of corporate finance that is predominately used by "GROWTH companies" is B: "new stock issues."
Explanation:
Growth companies are companies that are expanding rapidly and reinvesting their profits back into the business to fuel further growth. As such, they typically need to raise additional capital to support their expansion plans. One way they can do this is by issuing new stock, which allows them to sell ownership stakes in the company to investors in exchange for funding. This can be an attractive option for growth companies because it does not require them to take on debt, which can be costly and risky, and it also does not reduce their retained earnings, which they can continue to reinvest in the business. Retained earnings and borrowing are also commonly used methods of corporate finance, but they may not be as suitable for growth companies depending on their specific circumstances.
In 2021, assuming K-Tech has declared no dividends, what are the noncontrolling interest's share of the subsidiary's Income and the ending balance of the noncontrolling interest in the subsidiary?a- $40,000 and $215,200. b- $34,880 and $244,960. c- $32,320 and $250,080 d- $27,200 and $234.160.
Answers
Option B is correct the noncontrolling interest's share of the subsidiary's income and the noncontrolling interest's ending balance in the subsidiary are $34,880 and $244,960, respectively.
A non-controlling interest, also known as a minority interest, is an ownership position in which a shareholder owns less than 50% of the outstanding shares but has no say in decision-making. Non-controlling interests are calculated using the net asset value of the entity and do not take into account potential voting rights.
Most public company shareholders today would be classified as having a non-controlling interest, with a 5% to 10% equity stake considered a significant holding in a single company. A non-controlling interest differs from a controlling, or majority, interest in a company, where the investor has voting rights and can often influence the company's direction.
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What are the effects of unanticipated deflation? Multiple select question. The real incomes of people with fixed nominal incomes will increase. The purchasing power of savings will increase. The real value of fixed-monetary assets will decline. Creditors will benefit at the expense of debtors.
Answers
Unanticipated deflation involves the sudden decrease in the prices of goods and services .The effects of unanticipated deflation include
The purchasing power of savings will increaseCreditors will benefit at the expense of debtors.The real value of fixed-monetary assets will declineThe purchasing power of savings will increase as the prices of goods and services has reduced thereby giving rise to buying more with the same amount of money.
Other effects include creditors benefiting at the expense of debtors and the real value of fixed-monetary assets being on the decline.
However, the real value of real incomes of people with fixed nominal incomes will not increase as no change occurs when dealing with deflation as there is usually no adjustments.
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If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of merchandise sold?.
Answers
The error will be declared as overstated.
What is overstated?
If an account or a figure on an account is inflated, the amount represented on the financial statement will be more than it should be.
Auditors will question the board of directors of the corporation to explain why non-current assets in the accounts were exaggerated and not represented at their recoverable amount.
Preproduction expenses for the fiscal year 2010 were inflated by almost $4 million, totaling $55.4 million.
If an account or a figure on an account is inflated, the amount represented on the financial statement will be more than it should be.
The phrase "overstated" has two meanings when used by an accountant:
1. The reported sum is inaccurate, and
2. The amount that was reported exceeds what is true or accurate.
Another account will also have an inaccurate balance in a double-entry accounting or bookkeeping system.
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If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of merchandise sold?
Which phrase best describes the purpose of a slide master? Check all that apply.
A. to determine the layout for each individual slide in a presentation
B. to allow users to give each slide in a presentation a unique look and feel
C. to establish the layout of all slides, or a group of slides, in a presentation
D. to determine the theme of all slides, or a group of slides, in a presentation
E. to set the thematic characteristics of each individual slide in a presentation
F. to allow users to apply changes in layout or theme to an entire presentation
Answers
Answer: to establish the layout of all slides, or a group of slides, in a presentation.
to determine the theme of all slides, or a group of slides, in a presentation.
to allow users to apply changes in layout or theme to an entire presentation.
Explanation:
It should be noted that the Slide Master refers to the top slide which controls the information regarding the background, fonts, theme, layout, and color of all the slides in Microsoft PowerPoint.
The phrase best describes the purpose of a slide master include:
• to establish the layout of all slides, or a group of slides, in a presentation.
• to determine the theme of all slides, or a group of slides, in a presentation.
• to allow users to apply changes in layout or theme to an entire presentation.
Therefore, the correct options are C, D and F.
Answer:
C
D
F
Explanation:
edge
Explain the difference between a job interview and a interview
Answers
Answer:
An interview is a procedure designed to obtain information from a person through oral responses to oral inquiries. An interview is the way of face to face conversation between the interviewer and the interviewee, where the interviewer seeks replies from the interviewee for choosing a potential human resource.
Explanation:
what is the difference between equation method and contribution margin method for break even analysis
Answers
The primary difference between the Equation Method and Contribution Margin Method lies in their approach to calculating the break-even point, which is the level at which an organization's revenues equal its costs.
The Equation Method focuses on determining the break-even point by setting the total revenues equal to total costs, forming an equation that can be solved for the desired output level. The equation is typically set as follows: Total Revenue (TR) = Total Fixed Costs (TFC) + Total Variable Costs (TVC). By substituting the necessary values and solving for the unknown variable (output level), you can determine the break-even point. On the other hand, the Contribution Margin Method simplifies this process by analyzing the per-unit contribution margin, which is the difference between the selling price per unit and the variable cost per unit. This method calculates the break-even point by dividing the total fixed costs by the contribution margin per unit.
The formula for this method is: Break-even Point (in units) = Total Fixed Costs / Contribution Margin per Unit. This approach highlights the importance of the contribution margin as an indicator of how efficiently a company can cover its fixed costs. In summary, while both methods can accurately calculate the break-even point, the Equation Method requires setting up an equation based on total revenues and costs, while the Contribution Margin Method simplifies the process by focusing on per-unit contributions. Both methods are valuable tools for businesses to analyze their cost structures and make informed decisions.
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the principal of a mortgage loan is the
a. down payment minus the closing costs minus the purchase price
b. purchase price plus the closing costs minus the down payment
c. down payment plus the closing costs plus the down payment
d. purchase price minus the closing costs minus the down payment
Answers
The down payment less the closing charges less the purchase price is the mortgage loan's principle.
What does a mortgage look like in its simplest form?When you enter into a mortgage with a lender, you give the lender the right to seize the property if they are unable to make the loan amount back plus the interest. You might be able to get a mortgage loan that will enable you buy a new house using the worth of the an existing home as security.
Why do individuals use mortgages?Mortgage loans assist people in financing the purchase of real estate by taking a small portion of the property's overall worth as payment. How Do Mortgages Work A mortgage is a loan used to pay for the upkeep of a home, piece of land, or other kinds of rental properties.
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Which of the following is a misconception about marketing?
Marketing focuses on relationships.
Marketing focuses on satisfying the customer.
Marketing is equivalent to sales and advertising.
Marketing involves numbers.
Answers
Answer: The misconception is that marketing is equivalent to sales and advertising. While sales and advertising are important components of marketing, they are not the whole picture. Marketing is a broader concept that encompasses a variety of activities aimed at promoting and selling products or services.
Explanation:
Marketing involves researching and understanding customer needs and preferences, developing and promoting products or services to meet those needs, pricing products and services, and distributing them to customers through various channels. It also involves building and maintaining relationships with customers through customer service, after-sales support, and other activities.
So, while sales and advertising are important aspects of marketing, they do not define the whole field. Marketing is focused on relationships with customers and satisfying their needs, and it often involves the use of numbers to track and analyze customer behavior, market trends, and the effectiveness of marketing campaigns.
Try 2: Suppose $5000 is invested at an annual interest rate of 6.75% for a period of 10 years. Compute the future value of the investment if the interest is compounded annually, semiannually, quarterly, weekly, monthly, and continuously.
Answers
To calculate the future value of an investment with different compounding periods, we can use the formula for compound interest:
Future Value (FV) = P(1 + r/n)⁽ⁿᵗ⁾
Where:
P = Principal amount (initial investment)
r = Annual interest rate (as a decimal)
n = Number of times the interest is compounded per year
t = Number of years
Let's calculate the future value of the $5000 investment with different compounding periods:
= 6.75% or 0.0675 (as a decimal)
t = 10 years
FVannually= $5000 * (1 + 0.0675/1)⁽¹*¹⁰⁾ = $5000 * (1.0675)¹⁰ ≈ $8944.45
2. Compounded Semiannually:
n = 2 (compounded twice a year)
r = 6.75% or 0.0675 (as a decimal)
t = 10 years
FVsemiannually= $5000 * (1 + 0.0675/2)⁽²*¹⁰⁾ = $5000 * (1.03375)²⁰ ≈ $8984.73
3. Compounded Quarterly:
n = 4 (compounded four times a year)
r = 6.75% or 0.0675 (as a decimal)
t = 10 years
FVquarterly= $5000 * (1 + 0.0675/4)⁽⁴*¹⁰⁾ = $500
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A large bakery buys flour in 25 kg bags. The bakery uses an average of' 4,860 bags a year. Preparing an order and receiving a shipment of flour bags involves a cost of $10 per order. Annual holding cost is $5 per flour bag. a) Determine the economic order quantity.
b) What is the average number of bags on hand (i.e., in inventory)?
c) How many orders per year will there be?
d)Calculate the total annual cost of ordering and holding flour.
e)If ordering costs were to increase by 50 percent order, by what percentage would the EOQ change?
Answers
a) Economic Order Quantity(EQO):Economic Order Quantity can be calculated using the following formula. \(EOQ = \sqrt{\frac{2DS}{H}}\)Where D = Annual Demand in Units S = Ordering Cost per Order H = Annual Holding Cost per UnitThen EOQ will be: \(EOQ
= \sqrt{\frac{2*4,860*10}{5}}\)= \(\sqrt{19,440}\) = \(139.28\) (approx.)The economic order quantity is 139 bags.b) Average Number of Bags on Hand:To find out the average number of bags on hand, we can use the following formula: \(Average\ number\ of\ bags\ on\ hand = \frac{EOQ}{2}\)= \(\frac{139}{2}\) = \(69.5\) (approx.)The average number of bags on hand is 69.5 bags.c)
Number of Orders per Year:We can find the number of orders per year by using the following formula: \(Number\ of\ Orders\ per\ Year = \frac{D}{EOQ}\)= \(\frac{4,860}{139}\) = \(34.89\) (approx.)So, there will be 34 orders per year.d) Total Annual Cost of Ordering and Holding Flour:Total Annual Cost of Ordering and Holding Flour can be calculated using the following formula:
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Teresa is considering purchasing a home for $220,000 by taking out a loan with an interest rate of 4.3% for 30 years. What would her monthly payment be?
Use the monthly payment formula to calculate the monthly payment for this loan:
M =
M = monthly payment
P = principal
r = interest rate
t = number of years
$896.25
$1,088.72
$1,868.70
$2,069.75
Answers
Answer:
$1,088.72
Explanation:
This is an annuities situation. The applicable formula is
M = PV × r
1 − (1+r)−n
where p = $220,000
r = 4.3% interest rate per year, Converted to monthly rate = 4.3/100 /12=0.00358
r = 30 year, which is 30 x 12 months= 360 months
M= $220,000 x 0.00358
1 - (1+0.00358 ) ^ - 360
M=$220,000 x 0.00358
1- 0.2762
M = $220,000 x (0.00358 /0.7238)
M = $220,000 x 0.0049461
M = 1,088.12
. the explanation for a downsloping aggregate demand curve differs from the explanation for the downsloping demand curve for a single product because
Answers
The explanation for a downsloping aggregate demand curve differs from the explanation for the downsloping demand curve for a single product because they are based on different factors and influences.
The downsloping demand curve for a single product is based on the law of demand, which states that the quantity demanded of a product decreases as its price increases, all other factors remaining constant. In other words, consumers tend to buy less of a product when its price goes up, and buy more of it when its price goes down. This is due to factors such as income, preferences, and the availability of substitute products.
On the other hand, the downsloping aggregate demand curve is based on the relationship between the overall price level and the quantity of goods and services demanded in an economy. The aggregate demand curve is downward-sloping because as the price level rises, the purchasing power of consumers decreases, leading to a decrease in the quantity demanded of goods and services.
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An electronic banking outlet that enables customers to use a card to withdraw money is called
Answers
Answer: Automated Teller Machines (ATMs)
Explanation:
An ATM, which stands for automated teller machine, is a specialized computer that makes it easy to manage the funds in a bank account. It enables users to check account balances, withdraw or deposit funds, print a statement of account activities or transactions, and even buy stamps.
An ATM, which stands for automated teller machine, is a specialized computer that makes it easy to manage the funds in a bank account. It enables users to check account balances, withdraw or deposit funds, print a statement of account activities or transactions, and even buy stamps.
what is the tax multiplier formula?
Answers
The tax multiplier formula is used to calculate the impact of changes in government tax policies on the overall economy. It is calculated as follows:
Tax Multiplier = - MPC / (1 - MPC)
The tax multiplier is a measure of how much an initial change in taxes affects overall economic activity. It is a concept used in macroeconomics to understand the impact of fiscal policy on the economy. The tax multiplier indicates the change in national income or output caused by a change in taxation.
When a government increases taxes, people have less money to spend on goods and services. This reduction in spending causes a decrease in demand, which in turn leads to a decrease in production, employment, and income. The tax multiplier measures the magnitude of this chain reaction. A tax multiplier is a negative number because an increase in taxes decreases economic activity.
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which is a common use for minerals
Answers
Answer:
in food they provide day-to-day nutrients that the body needs in order to function
Explanation:
Answer:
Apple sauce!
Explanation:
Hope this helps sorry if it does not! :0
Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by C=500+2q 2 where q is the level of output and C is total cost. (The marginal cost of production, MC(q), is 4q; the fixed cost, FC, is $500), If the price of a watch is $100, how many watches should you produce to maximize profits? You should produce Watches. (Enter your response as an integer. ) What will the profit level be? Profit will be $ (Enter your response rounded to two decimal places. ) At what minimum price will the firm produce a positive output? In the short run, the firm will produce if price is greater than $ per watch. (Enter your response as an integer. )
Answers
One should produce 25 watches to maximize profits. The profit level will be $750. The firm will produce a positive output if the price is greater than $50 per watch.
As the manager of a watchmaking firm operating in a competitive market, you want to determine the level of output that will maximize your profits. To do this, you need to consider the cost of production and the price of the watch.
The cost of production is given by the equation
C = 500 + 2q²,
where q is the level of output and C is the total cost. The marginal cost of production, MC(q), is 4q, and the fixed cost, FC, is $500.
To maximize profits, you need to find the level of output where marginal cost equals the price of the watch. In this case, the price of the watch is $100. So, we set MC(q) equal to 100 and solve for q:
4q = 100
q = 25
Therefore, you should produce 25 watches to maximize profits.
To calculate the profit level, we need to subtract the total cost from the total revenue. The total revenue is given by the equation R = p*q,
where p is the price of the watch. In this case, p = $100.
Profit = Total Revenue - Total Cost
Profit = p*q - C
Profit = 100*25 - (500 + 2*(25²))
Profit = 2500 - (500 + 2*625)
Profit = 2500 - (500 + 1250)
Profit = 2500 - 1750
Profit = $750
Therefore, the profit level will be $750.
In the short run, the firm will produce a positive output if the price is greater than the average variable cost (AVC) per watch. The average variable cost per watch is calculated by dividing the variable cost (VC) by the level of output (q). In this case, VC = 2q² and q = 25.
AVC = VC / q
AVC = (2*25²) / 25
AVC = 2*25
AVC = $50
Therefore, the firm will produce a positive output if the price is greater than $50 per watch.
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Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT?
Answers
All of the following, with the exception of conditions, are required.
Describe insurance.One party will agree to compensate another in the event of a certain loss, damage, or injury in exchange for a fee in order to safeguard oneself from financial loss. It is a risk management technique that is typically used to guard against the danger of a hypothetical loss that may or may not materialise.
An underwriter, insurer, firm, or carrier is a company that provides insurance. A person or organisation that obtains insurance is known as a policyholder, whereas a person or organisation that the policy protects is known as an insured.
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What are two lessons financial managers should be aware of in regard to financial leverage?
Answers
Debt is not cheap financing and many financing schemes hold hidden debt costs are two lessons financial managers should be aware of in regard to financial leverage.
What Is Financial Leverage?
Financial leverage results from using borrowed capital as a funding source when investing to expand the firm's asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.
Concept of Leverage:
Leverage is the use of debt (borrowed capital) in order to undertake an investment or project. The result is to multiply the potential returns from a project. At the same time, leverage will also multiply the potential downside risk in case the investment does not pan out. When one refers to a company, property, or investment as "highly leveraged," it means that item has more debt than equity.
The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments, including options, futures, and margin accounts. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value.
Investors who are not comfortable using leverage directly have a variety of ways to access leverage indirectly. They can invest in companies that use leverage in the normal course of their business to finance or expand operations—without increasing their outlay.
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A household consists of a married couple, their two-year-old daughter. the couple's daughter has no income and lived with her parents all of last year. How many exemptions can the couple claim on last year's tax return if they file with the married filling jointly status
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The total number of exemptions the couple can claim on their last year's tax return if they file with the married filing jointly status would be three. Option D
How many exemptions can the can the couple claim on last year's tax returnFor tax purposes, an exemption is a deduction from an individual's taxable income for themselves and their dependents. In the given scenario, the household consists of a married couple and their two-year-old daughter. The couple can claim one exemption for themselves and one exemption for their daughter, as she is their dependent and has no income.
Therefore, the total number of exemptions the couple can claim on their last year's tax return if they file with the married filing jointly status would be three (one for each spouse and one for their dependent daughter).
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Henry wrote 24 checks in April. The bank charges $0.15 a check.
The monthly service charge for the checking account is $5. What
is the total of the fees Henry pays in April on his checking
account?
Answers
Answer: $8.60
Explanation:
Since Henry wrote 24 checks in April and the bank charges $0.15 a check, the amount paid on the check will be:
= 24 × $0.15
= $3.60
Furthermore, since the monthly service charge for the checking account is $5, the total of the fees Henry pays in April on his checking account will be:
= $5 + $3.60
= $8.60
Therefore, the total amount that Henry will pay will be $8.60.
A. Explain how an increase in interest rates affected Bear Stearns adversely. B. What is the difference between Asian options and lookback options? C. What are the two important features that distinguishes the risk-neutral world from the real world (objective world)?
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A. An increase in interest rates affected Bear Stearns adversely as it relied heavily on short-term financing to invest in long-term assets such as mortgage-backed securities. When interest rates increased, the cost of borrowing increased and the value of mortgage-backed securities decreased, leading to significant losses for Bear Stearns.
B. The main difference between Asian options and lookback options is in the way their payoff is calculated. Asian options have a payoff that depends on the average price of the underlying asset over a period of time, while lookback options have a payoff that depends on the highest or lowest price of the underlying asset over a period of time.
C. The two important features that distinguish the risk-neutral world from the real world are:
In the risk-neutral world, there are no transaction costs, taxes, or other frictions that exist in the real world. In the risk-neutral world, all investors have the same expectations about the future, and there are no information asymmetries or irrational behavior.Learn more about interest rates
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A model that shows the trade-offs and opportunity costs of producing an additional unit of a good relative to what must be given up in the production of another good.
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Answer:
production possibilities curve (PPC)
Explanation:
The PPC is used to explain the tradeoffs that producers face when having to choose between 2 different alternative products or services. The more they choose of one product, the less they will be able to produce of the other product. Opportunity costs are the associated costs or benefits lost resulting from choosing one activity or investment over another alternative.
.3. One day you happen to hear a snippet of conversation between two graduate students, who are drinking coffee and contemplating an open box of exquisitely delicious chocolate truffles in the Page Break Café. The first student opines that one can definitely outline a set of objective design principles that should underpin the construction of any professional chart or map. The second student disagrees vehemently and argues that the one and only important thing to worry about is aesthetics. The first student is speechless. What do you think? Use your knowledge of data visualization to inform your answer, and be sure to explain your answer carefully.
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The debate between the two graduate students revolves around the importance of objective design principles versus aesthetics in the construction of professional charts or maps.
Objective design principles in data visualization serve as guidelines to ensure clarity, accuracy, and effective communication of information. These principles include considerations such as appropriate use of colors, legibility of text, proper labeling, and accurate representation of data. By adhering to these principles, charts and maps can convey the intended message clearly, facilitating data comprehension and analysis.
However, aesthetics cannot be disregarded. Visual appeal and aesthetics contribute to the overall user experience and can enhance engagement with the data. An aesthetically pleasing chart or map can captivate the viewer's attention, stimulate interest, and encourage exploration of the data. Attention to aesthetics involves aspects such as visual balance, appropriate use of visuals and typography, and overall design coherence.
Both objective design principles and aesthetics are important in data visualization because they serve different purposes. Objective design principles ensure accuracy and effective communication, while aesthetics enhance engagement and user experience. Striking a balance between these two aspects is crucial to create visually appealing and informative visualizations that effectively convey the intended message while engaging the audience.
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brijesh is negotiating with sara, who wants to purchase his car. the only issue is price. this is an example of a (select one):
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The fact that the only issue that Brijesh has is the price means that this is a A. position - based negotiation.
What is a position - based negotiation?Brijesh and Sara find themselves engaged in a negotiation concerning the sale of Brijesh's car. While they discuss various aspects, the predominant matter under consideration revolves around the pricing. This scenario exemplifies a negotiation primarily centered around the monetary value, presenting a price-oriented negotiation.
In this type of negotiation, the primary focus lies in determining and reaching an agreement on the financial worth or cost of the product or service. Each party involved likely holds differing positions or preferences regarding the price, necessitating an intricate and fluid negotiation process aimed at attaining a mutually satisfactory price point.
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Options include:
A. Location based negotiation
B. Position based negotiation
C. Product based negotiation
1. the accounting for nonmonetary exchanges of property, plant and equipment differ depending on whether there is commercial substance attached to the exchange. describe the accounting for a transaction that has commercial substance and the accounting for a transaction that does not have commercial substance.
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If the future cash flows of the firm are anticipated to alter significantly as a result of the transaction, then a nonmonetary exchange has commercial substance.
Record the acquired asset at the book value of the asset that was exchanged if there is no commercial substance.
What does it mean when a transaction has commercial substance ?A transaction has commercial substance when it leads to a change in the entity-specific value of the exchanged goods or the configuration (risk, timing, and quantity) of the cash flows directly associated with the traded objects.
According to the given information
If the future cash flows of the firm are anticipated to alter significantly as a result of the transaction, then a nonmonetary exchange has commercial substance.
The parties should record a gain or loss on the exchange if there is commercial substance, which is when there is a change in cash flow as a result of the transaction.
Record the acquired asset at the book value of the asset that was exchanged if there is no commercial substance.
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Mary, who is licensed as an agent in State A, got a promotion and will turn her clients over to Julie, who is licensed only in State B. Before Julie can take over the accounts, she must A) register with State A B) receive permission from each of those clients C) register with FINRA D) register with the NYSE
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Julie, who is taking over the clients of Mary in State A, but registered in State B, must first A) register with State A.
Julie does not need permission from all the clients in State A. It is not required that she must register with FINRA or the NYSE because she was registered before.
Thus, Julie only needs to register with State A to take over Mary's clients in State A.
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