In the short-term, the markets in which the demand is elastic are the Recreation and Food markets. When a small change in the price of goods results in a large change in the quantity demanded, demand is considered to be elastic. In the short-term, consumers have less time to adjust their buying habits and to find alternatives.
For example, if the price of food rises, people can find alternatives or adjust their diets. In the case of recreation, there are a plethora of other activities one can engage in. Clothing is also somewhat elastic in the short-term but less so than recreation and food.
The markets in which the demand is inelastic include transportation and alcohol and tobacco. Inelastic demand means that consumers will continue to buy the product even if the price rises. In the case of transportation, it is a necessity that people will need, and they will buy it even if it is a bit more expensive. In the case of alcohol and tobacco, people who use them are usually addicted, and so will buy them even if the prices increase.
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Hassan's income increases and, as a result, he buys more fish. Is fish an inferior or a normal good? Why? What happens to Hassan's demand curve for fish? Explain. Over the past 30 years, technological advances have reduced the cost of computer chips. How do you think this has affected the market for computers? And the market for typewriters? Explain.
Fish is likely a normal good for Hassan because as his income increases, he buys more of it. The demand curve for fish would shift to the right, indicating an increase in demand, as Hassan's higher income allows him to purchase more fish.
Fish being a normal good for Hassan implies that it is a product for which demand increases as income rises. This suggests that fish is considered a desirable and higher-quality product that people are willing to consume more of when they have more purchasing power. As Hassan's income increases, he has more disposable income available to spend on various goods, including fish. Consequently, he chooses to buy more fish, indicating that it is a normal good for him.
In terms of the demand curve for fish, the increase in Hassan's income would cause a rightward shift in the curve. This means that at each price level, Hassan is now willing and able to buy more fish compared to his previous income level. The shift reflects an increase in demand for fish, as higher income enables him to afford and consume a greater quantity of fish. The entire demand curve would shift, indicating a change in the relationship between the price of fish and the quantity demanded by Hassan. The extent of the shift depends on the income elasticity of demand for fish, which measures the responsiveness of quantity demanded to changes in income.
Regarding technological advances in computer chips, they have had a significant impact on the market for computers. These advancements have led to increased efficiency, improved performance, and reduced production costs for computer manufacturers. As a result, the market for computers has experienced increased supply, lower prices, and higher demand.
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In preparing its bank reconciliation at December 31, 2022, Granville Company had available the following data:
Balance per bank statement, 31/12/22 $40,035
Deposit in transit, 31/12/22 6,300
Outstanding cheques, 31/12/22 7,450
Amount erroneously credited by the bank to company's account, 28/12/22 200
Bank service charges for December 120
Granville Company's adjusted cash balance at December 31, 2022, is
A. $38,685.
B. $39,085.
C. $26,085.
D. $38,565.
Granville Company's adjusted cash balance on December 31, 2022, is $38,565.
Start with the balance per the bank statement, which is $40,035, then consider the following items:
1. Deposit in transit: This amount represents deposits made by Granville Company but not yet recorded by the bank. It should be added to the balance bank statement. The deposit in transit is $6,300.
2. Outstanding cheques: These are cheques issued by Granville Company but not yet cleared by the bank. We need to subtract the number of outstanding cheques from the balance bank statement. The outstanding cheques amount to $7,450.
3. Amount erroneously credited by the bank: This represents an error made by the bank, resulting in an overstatement of the company's account. We need to subtract this amount from the balance bank statement. The amount erroneously credited is $200.
4. Bank service charges: These charges are deducted from the balance bank statement. The bank service charges for December are $120.
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Which of the following is not one of the appeals of an unrelated diversification strategy? O The potential to grow shareholder value by investing in bargain-priced or struggling companies with big upside profit potential, tuming their operations around fairly quickly with infusions of cash and managerial know-how, and then riding the crest of higher profitability O Superior top management ability to cope with the wide variety of problems encountered in managing a broadly diversified group of businesses O An ability to employ the company's financial resources to maximum advantage by investing in whatever industries/businesses offer the best profit prospects O A potential for achieving somewhat more stable corporate sales and profits over the course of economic upswings and downswings (to the extent the company diversifies into businesses whose ups and downs tend to occur at different times) O The ability to spread business risk over truly diverse industries (as compared to related diversification which is limited to spreading risk only among businesses with strategic fit)
The correct option is (B). Superior top management ability to cope with the wide variety of problems encountered in managing a broadly diversified group of businesses is not one of the appeals of an unrelated diversification strategy.
An unrelated diversification strategy refers to the creation of a new business that has nothing to do with the existing business. It implies developing or acquiring firms in different industries and with unrelated product lines, which are different from the existing business.
A diversified company is one whose business activities span a wide range of industries or product lines. This strategy helps the organization to reduce its business risk by spreading it over several industries. The various appeals of an unrelated diversification strategy are as follows:
1. Potential to grow shareholder value by investing in bargain-priced or struggling companies with significant upside profit potential.
2. Ability to employ the company's financial resources to maximum advantage by investing in whatever industries/businesses offer the best profit prospects.
3. Potential for achieving more stable corporate sales and profits over the course of economic upswings and downswings.
4. The ability to spread business risk over truly diverse industries (as compared to related diversification which is limited to spreading risk only among businesses with strategic fit).
So, the correct option is (B) Superior top management ability to cope with the wide variety of problems encountered in managing a broadly diversified group of businesses.
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Question 9
Proposition 13, enacted in 1977, reflected California voters' desire to
a. reject gun control laws
b. reduce emissions from automobiles
c. cut property taxes in the state
d. reduce funding for state universities
Question 10
By the end of the 1970s, California's financial picture was darkened due to all of the following except:
a. reduced defense spending after the end of the Vietnam war.
b. OPEC's raise in oil prices causing an "energy crisis".
c. taxpayer revolts like Prop. 13
d. a reduction in emissions from newly purchased automobiles.
The correct answer of Q9 and Q10 is (a) and (b).
Energy conservation refers to the act of conserving energy by practicing efficient energy utilization, avoiding wastage, and reducing energy use. OPEC's raise in oil prices caused an "energy crisis."
Energy conservation refers to the act of conserving energy by practicing efficient energy utilization, avoiding wastage, and reducing energy use. It is about decreasing energy consumption while still enjoying the same level of service. This can be done through various methods such as reducing energy use, lowering consumption, or using more efficient technology.OPEC's raise in oil prices caused an "energy crisis." The OPEC oil embargo of 1973 caused a global economic and political crisis that lasted until the early 1980s. This occurred when OPEC, a group of oil-producing nations, stopped selling oil to countries that supported Israel in the Yom Kippur War, causing prices to skyrocket and energy supplies to be reduced worldwide. The increase in oil prices caused inflation, a decline in economic growth, and a decrease in the standard of living. As a result, many people began to seek ways to conserve energy and reduce consumption to avoid high energy costs. This led to the development of more energy-efficient products, such as cars, appliances, and lighting, and the implementation of energy-saving measures. These efforts resulted in a more sustainable and efficient use of energy and a reduction in dependence on fossil fuels, reducing the effects of the energy crisis in the long run.The reduction in emissions from newly purchased automobiles is another way to reduce energy consumption. This can be achieved by using electric cars, hybrid cars, or fuel-efficient cars that use less gasoline and produce fewer emissions. These cars use advanced technologies such as regenerative braking, which converts the car's kinetic energy into electricity and stores it in the battery. This reduces the amount of energy required to power the car and reduces emissions. Additionally, many countries have implemented emissions standards for vehicles to reduce the amount of pollutants released into the environment, which has resulted in cleaner air and a healthier environment.For such more questions on environment
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Consider a market with the inverse demand function P(q) = a − bq, where a and b are positive constants. The cost function of the firm under consideration is C(q) = cq where 0
In the given market scenario, where the inverse demand function is P(q) = a - bq and the cost function is C(q) = cq (where c > 0), we need to determine the optimal level of output and price for the firm.
To find the optimal output level, we can set the marginal cost (MC) equal to the marginal revenue (MR), as profit maximization occurs when these two are equal.
The marginal cost is the derivative of the cost function, which is MC(q) = c. The marginal revenue can be calculated using the inverse demand function: MR(q) = P(q) + q * dP/dq. Taking the derivative of the inverse demand function, we have dP/dq = -b. Substituting these values into the marginal revenue equation, we get MR(q) = a - bq - bq = a - 2bq.
Now, equating MC and MR, we have c = a - 2bq. Solving for q, we find q = (a - c) / (2b).
To determine the price, we substitute the optimal output level into the inverse demand function: P(q) = a - bq. Thus, the price is P = a - b * ((a - c) / (2b)). Simplifying, we get P = (2a + c) / 2.
The optimal output level for the firm is q = (a - c) / (2b), and the corresponding price is P = (2a + c) / 2.
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Why not because If they decide to pursue a non-asset based growth strategy, then they will only be able to acquire smaller companies with great products but lack a lot of resources.
Should the Wheels Group pursue a non-asset-based growth strategy or an asset-based strategy? Why or why not?
This would be beneficial for both the acquiring firm and the acquired firm since it would give them access to many more resources than either firm would have access too on their own.
It's urgent
The decision of whether the Wheels Group should pursue a non-asset-based growth strategy or an asset-based strategy depends on various factors.
If the company has limited resources but wants to acquire smaller firms with great products, a non-asset-based strategy may be suitable. This approach allows the Wheels Group to leverage the strengths and innovations of the acquired firms without the need for significant investments in physical assets. It can provide access to new markets and technologies while minimizing upfront costs.
However, if the Wheels Group has the financial means and wants more control over the supply chain, an asset-based strategy could be considered. Acquiring companies with substantial assets can provide economies of scale and operational efficiencies.
Ultimately, the decision should align with the company's long-term goals, market opportunities, and competitive landscape. Conducting a thorough analysis and seeking expert advice can help determine the most appropriate growth strategy for the Wheels Group.
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Diamond Foods Payments to Nut Growers
The leadership of Diamond Foods (DF), the global California-based premium snack food company, was excited. In the fall of 2011, the company was close to finalizing an agreement with Proctor & Gamble to acquire Pringles brand in exchange for DF stock, this acquisition would help the company achieve the number two position in the U.S. snack foods industry behind PepsiCo. DF product lines currently included potatoes chips (Kettle), popcorn (Pop-Secret), and (nuts) snack nuts, in-shell nuts and culinary nuts) Emerald and Diamond of California). DF started in 1912 as a grower-owned cooperative called Diamond of California. The company originally focused on walnuts, but more recently they transformed into a diverse snack food company. The business changed from a co-operative business status and went public in 2005 with the NASDAQ ticker DMND. The stock price increased, and in September 2011, the price was at an all-time high of $92 per share.
The person who orchestrated the company’s expansion and growth was CEO and President Michael Mendes, who was hired in 1997. He had previously worked at Hormel Foods Corporation and Dole Food Company. Mendez was very competitive and implemented the companywide philosophy of "bigger is better". This viewpoint was the corporate culture, and it had a significant impact on employees of DF. This aggressive company culture resulted in an emphasis on financial performance and some bold and very expensive acquisitions (e.g., Kettle and Pop-Secret). The most expensive acquisition was to be Pringles. DF was making this acquisition, so it could be a significant player in the very competitive snack foods space where it felt pressure for financial success and greater market share amid increasing industry competition.
In Fall of 2011, Mark Roberts, founder of the Off-Wall Street Consulting Group, received an anonymous call. For the fiscal year ending in July 2011, the caller indicated that DF was making ‘momentum payments’ to growers for walnuts delivered in September 2011. It appears that the approximately $60 million payments could be impacting the wrong fiscal year financial statements. Robert accused DF of incorrectly reporting its payments to suppliers on the company financial statements. DF denied any illegal actions, and they replied that the payments were on advance on the fiscal 2012 crop and had nothing to do with fiscal 2011. Unfortunately, the nut growers disagreed. They were told by the company to keep the money even if they were not going to provide crops for 2012. Supposedly, they were told that the payments were for the prior year.
Investigation into the situation ascertained that an additional approximately $20 million of ‘continuity payments’ were made by DF growers in fall 2010. Again, the question arose as to what fiscal year did these payments relate. Were the payments recorded in the proper year? Were the books cooked? Would the Pringles acquisition occur?
There are many accounting rules that may apply in this case. Discuss the rules that you believe may apply.
In what fiscal periods should fall 2010 and fall 2011 payments have been recorded in the DF income statements?
When was the cash paid to the growers? Was it a different period than when the payments were recorded?
How were the financial statements impacted in 2010 and 2011?
2. Were there any other things happening in the company that could have had a part in this?
3. How was this case of fraud found? Who found it? What are some steps that could have been taken that may have prevented this? What changes did this company make in order to prevent this from occurring again?
4. In the end, was the Pringles line acquired?
The accounting rules that may apply in this case include revenue recognition, accrual accounting, and the matching principle.
The fall 2010 and fall 2011 payments should have been recorded in the income statements of the corresponding fiscal periods when the services were provided or the goods were delivered. The cash paid to the growers may have occurred in a different period than when the payments were recorded. The financial statements of DF in 2010 and 2011 were likely impacted by the incorrect recording of payments, potentially leading to misstated financial results.
The case of fraud was discovered through an anonymous call to Mark Roberts, who raised concerns about the payments. Steps that could have been taken to prevent this include implementing stronger internal controls, conducting regular audits, and ensuring compliance with accounting principles. To prevent similar incidents, the company may have made changes such as improving financial oversight, enhancing transparency, and tightening the process for recording payments.
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1. Suppose the reserve ratio requirement is 30% and there is an increase in bank excess reserves of $50 million a. Calculate the money multiplier. Show your work. b. What is the total amount of additional deposits created by this initial increase in bank excess reserves? Show your work. c. Explain based on your calculations in part b the meaning of the money multiplier d Suppose the Federal Reserve decreases the reserve ratio to 20%. Calculate the new money multiplier and show your work. Explain why the money multiplier increased or decrease as a result of the higher reserve ratio.
The reserve ratio decreases, the amount of excess reserves held by the bank increases, which, in turn, leads to an increase in the money supply generated by each dollar of the bank's excess reserves.
a) Calculation of Money Multiplier in the given scenario: Here, the reserve ratio requirement is 30%, and the bank has an excess reserve of $50 million.
So, it can be calculated as follows :Money multiplier = 1 / reserve ratio Money multiplier = 1 / 0.3Money multiplier = 3.33Therefore, the money multiplier is 3.33.
b) Calculation of the total amount of additional deposits created by this initial increase in bank excess reserves: The total amount of additional deposits created by this initial increase in bank excess reserves is the product of the money multiplier and the excess reserves of banks.
Total additional deposits created = Money multiplier x Excess reserves Total additional deposits created = 3.33 x $50 million Total additional deposits created = $166.5 million Therefore, the total amount of additional deposits created by this initial increase in bank excess reserves is $166.5 million.
c) Explanation of the meaning of the money multiplier based on calculations in part b:From the above calculations, it can be interpreted that the money multiplier determines the amount of money supply generated by each dollar of the bank's excess reserves. The value of the money multiplier in this scenario is 3.33, which means that the bank can create $3.33 of deposits from each dollar of excess reserves it has.
d) Calculation of new money multiplier and explanation of the increase or decrease in the money multiplier as a result of the higher reserve ratio: When the Federal Reserve decreases the reserve ratio to 20%, the new money multiplier can be calculated as follows: Money multiplier = 1 / reserve ratio Money multiplier = 1 / 0.2Money multiplier = 5Therefore, the new money multiplier is 5. The money multiplier increases when the reserve ratio decreases.
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Choose a FALSE statement regarding the t-distribution.
O The t distribution is based on the assumption that the population of interest is normal nearly normal.
O The t distribution has a greater spread than does the z distribution. As a result, the critical values of t for a given level of significance are larger in magnitude than the corresponding z critical values.
O There is not one t distribution, but rather a "family" of t distributions. All t distributions have a mean of zero and a standard deviation of 1.
O The higher the degree of confidence, the larger the sample required to give a certain precision.
The false statement regarding the t-distribution is: "The t distribution has a greater spread than does the z distribution. As a result, the critical values of t for a given level of significance are larger in magnitude than the corresponding z critical values."
The t distribution actually has a greater spread than the standard normal distribution (z distribution). This means that the critical values of t for a given level of significance are larger in magnitude than the corresponding z critical values. In other words, the tails of the t distribution are fatter than the tails of the standard normal distribution, which accounts for the larger critical values.
The t distribution is a family of distributions, and not all t distributions have a mean of zero and a standard deviation of 1. The shape of the t distribution depends on the degrees of freedom, which is determined by the sample size. As the sample size increases, the t distribution approaches the standard normal distribution.
The statement about the relationship between the degree of confidence and sample size is generally true. As the degree of confidence increases, the precision or level of certainty desired also increases. To achieve a higher degree of confidence, a larger sample size is typically required to provide more reliable and accurate results.
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Diana and Jim enter into a written contract under which Diana will sell Jim some of her rare comic books for $300. The contract contains a list of each comic book that is supposed to be part of the sale. The contract states that it contains the complete and final agreement reached by Diana and Jim. When Jim receives the comics, he is upset to find out that Diana did not include a particular Superman comic. He sues Diana, stating that even though the written contract does not mention that particular Superman issue, he and Diana had orally agreed, just before the contract was written, that she would include the Superman in the deal. Jim wants to submit evidence of their prior oral agreement. Diana argues that such evidence would violate the parol evidence rule. 1. Does this contract have the necessary element of consideration (Chapter 14)? 2. If so, discuss the benefit received by each party and the detriment suffered by each party? In other words, what is each party receiving and what is each party given up? 3. Is this contract enforceable or would it be illegal or violate public policy to enforce this contract (Chapter 15)? 4. Is this the type of contract that falls within the Statute of Frauds (Chapter 16)? 5. Will Jim be allowed to introduce parol evidence to show the party's prior oral agreement before the contract was made (Chapter 16)?
The contract between Diana and Jim involves the sale of rare comic books for $300. Jim claims an oral agreement for a particular Superman comic, while Diana argues against admitting parol evidence violating the parol evidence rule.
The contract has consideration as Jim pays $300 for the rare comic books, benefiting him with the acquisition and Diana with the payment.
This contract appears enforceable, without indications of illegality or violation of public policy.
It is advisable to check the specific jurisdiction's laws regarding the Statute of Frauds, as contracts for the sale of goods over a certain value may require a written agreement.
Jim may be allowed to introduce parol evidence if it falls within an exception to the parol evidence rule, such as proving fraud, mistake, or ambiguity. The admissibility of parol evidence would depend on the specific jurisdiction's laws and applicable case law.
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Ethics and corruption is increasingly important in the construction sector. You are requested to discuss the issues involved in ensuring the highest ethical standards, from the perspective of a UK based cost management professional services company planning to open a regional office in Abu Dhabi, to operate in the Middle East and Sub-Saharan Africa
As the construction sector grows, the importance of ethics and corruption control becomes increasingly important. Ethics is a critical aspect of any construction company, particularly those that want to operate in different parts of the world, such as the Middle East and Sub-Saharan Africa.
The United Arab Emirates has enacted strict legislation against corruption in the construction sector, and businesses that operate in the region must adhere to these regulations to avoid legal consequences. The construction industry is subject to various risks, including environmental challenges, economic and legal challenges, and risk management. However, businesses can establish internal control mechanisms to ensure compliance with ethical regulations.
The following measures may be taken to ensure compliance: • Companies should establish clear ethical standards and rules, ensuring that all employees are aware of them. • The introduction of comprehensive training programs for employees to ensure they understand the ethical policies. • Companies can establish an anonymous reporting mechanism for employees to report any unethical practices without fear of retaliation. • The establishment of policies and procedures to ensure that the company complies with ethical regulations. • Employing external auditors to conduct regular inspections of the company's operations to ensure compliance. Companies must have appropriate procedures in place to manage risk and guarantee ethical standards compliance. To expand operations into the Middle East and Sub-Saharan Africa, cost management professional services companies must work closely with regulatory authorities and consider various internal control mechanisms.
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Which of the following securities will likely have the highest default risk premium?
a. US Treasury Bond maturing in 2027
b. Bbb-rated corporate bond maturing in 2020, actively traded on a major exchange
c. Aaa-rated corporate bond maturing in 2015, not actively traded
The bond with the highest default risk premium among the three options given is the b. A BBB-rated corporate bond maturing in 2020, actively traded on a major exchange.
Explanation:Default risk premium is the extra amount of return that investors demand for bearing the risk that the borrower may default. In other words, it is the spread between the interest rate of a risk-free bond and that of a bond with default risk.The higher the perceived risk of default, the higher the default risk premium. Based on the options given, the bond with the highest default risk premium is the BBB-rated corporate bond that is actively traded on a major exchange.
This is because the BBB rating indicates that the bond has a higher default risk than the US Treasury bond and the Aaa-rated corporate bond. Additionally, being actively traded on a major exchange means that it is more liquid and therefore more attractive to investors, which could lead to a lower price and higher yield (and hence, higher default risk premium).Thus, the main answer to the question is option b. BBB-rated corporate bond maturing in 2020, actively traded on a major exchange.
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Friendly Environment is in the process of selling its shares in an auction IPO. At the end of the bidding period, the following bids are received. What are the total proceeds from the IPO if Friendly Environment is selling 820,000 shares?
Price ($) Number of Shares Bid
$19.70 50,000
$19.25 25,000
$19.15 25,000
$19.00 100,000
$18.75 125,000
$18.50 75,000
$18.25 150,000
$18.00 240,000
$17.75 80,000
$17.40 125,000
$17.15 150,000
$16.95 100,000
$16.80 60,000
To calculate the total proceeds from the IPO, we need to multiply the number of shares sold at each bid price by the respective bid price, and then sum up these amounts.
calculate the total proceeds:
$19.70 x 50,000 = $985,000
$19.25 x 25,000 = $481,250
$19.15 x 25,000 = $478,750
$19.00 x 100,000 = $1,900,000
$18.75 x 125,000 = $2,343,750
$18.50 x 75,000 = $1,387,500
$18.25 x 150,000 = $2,737,500
$18.00 x 240,000 = $4,320,000
$17.75 x 80,000 = $1,420,000
$17.40 x 125,000 = $2,175,000
$17.15 x 150,000 = $2,572,500
$16.95 x 100,000 = $1,695,000
$16.80 x 60,000 = $1,008,000
summing up these amounts:
$985,000 + $481,250 + $478,750 + $1,900,000 + $2,343,750 + $1,387,500 + $2,737,500 + $4,320,000 + $1,420,000 + $2,175,000 + $2,572,500 + $1,695,000 + $1,008,000 = $23,614,750
Therefore, the total proceeds from the IPO for selling 820,000 shares of Friendly Environment is $23,614,750.
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Please judge the statement is true or false and give explanation. ( explanation is important !)
There are two possible states in period 2. Your initial wealth is $500 and you will buy 10 shares of stock A and 5 shares of stock B in period 1. From this combination of shares you buy for the two stocks, in period 2, if state 1 arises, your wealth is $0 and if state 2 arises, your wealth is $1200. The price of a primary security on state 2 (a unit claim on state 2) is $24.
Initial [tex]wealth = $500Stock A (buy) = 10[/tex]shares Stock B (buy) = 5 shares State 1 (s1) [tex]wealth = $0State 2 (s2) wealth = $1200Price[/tex] of a primary security on state 2 (a unit claim on state 2) = $24Therefore,State 1 occurs if we get returns from stocks
A and B, both less than the original buying price, hence the state 1 [tex]returns = (10 * $10) + (5 * $20) = $200[/tex]
In state 1, there are no returns, thus our wealth will be initial wealth minus the amount spent on buying shares of stocks A and [tex]B = $500 - $300 = $200[/tex]
In state 1, the net wealth will be $200.Now, in State 2, the returns will be (10 * $20) + (5 * $40) = $400. So the net wealth in State 2 will be original wealth plus
[tex]returns = $500 + $400 = $900[/tex]
But it is given that the price of a primary security on state 2 (a unit claim on state 2) is $24.
Number of securities that can be bought in [tex]State 2 = (total wealth in State 2) / (price of a primary security on state 2) = $900/$24 = 37.5[/tex]So, we can buy only 37 securities and remaining money is lost. Hence, net wealth in state 2 will be [tex]($24 * 37) = $888.[/tex]
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How does enterprise architecture support business goals and strategy?
Enterprise architecture supports business goals and strategy in the following ways:1. Aligns IT with Business Goals: Enterprise architecture provides a structured way to ensure that IT initiatives are aligned with business goals. By aligning the organization's information technology with its goals, the organization can focus its resources on achieving its objectives.
2. Better Decision Making: Enterprise architecture provides a framework for making better decisions that align with the organization's business goals. The framework provides a common language and approach for stakeholders to use when making decisions about IT investments. It helps stakeholders understand how IT decisions will impact business goals.3. Identifying Opportunities for Business Improvement: Enterprise architecture provides a systematic approach for identifying opportunities for business improvement.
By understanding how the business operates and what the business goals are, the enterprise architect can identify areas where technology can help the organization achieve its goals.4. Improved Efficiency: Enterprise architecture improves efficiency by providing a common approach to managing IT. By standardizing IT processes and technologies, the organization can reduce complexity, increase efficiency, and reduce costs.5. Ensuring Regulatory Compliance: Enterprise architecture helps ensure regulatory compliance by providing a framework for managing information. The framework provides guidance on how to manage data, systems, and processes to ensure compliance with regulatory requirements.
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List and briefly describe the nine broad banking services.
There are nine broad banking services that financial institutions typically provide to their customers. These services cater to various financial needs and play a crucial role in the economy .
Here's a brief description of each:
1. Deposit Services: Banks accept deposits from individuals and businesses, allowing them to securely store their money. These deposits can be in the form of savings accounts, checking accounts, or certificates of deposit (CDs).
2. Loans and Credit Services: Banks provide loans and credit to individuals and businesses, helping them finance various needs such as home purchases, education, business expansion, and more. These services often involve interest rates and repayment terms.
3. Payment Services: Banks facilitate the movement of funds through payment services, including issuing checks, electronic funds transfers (EFTs), debit cards, credit cards, and online payment systems.
4. Foreign Exchange Services: Banks offer currency exchange services, allowing customers to convert their funds between different currencies for international travel, trade, or investment purposes.
5. Investment Services: Banks provide investment products such as mutual funds, stocks, bonds, and other securities. They may also offer investment advisory services to assist customers in making informed investment decisions.
6. Asset Management Services: Banks can manage and administer assets on behalf of individuals or institutional clients. This includes services like portfolio management, estate planning, trust management, and retirement planning.
7. Insurance Services: Many banks offer insurance products such as life insurance, health insurance, property insurance, and other related services to help individuals and businesses protect their assets and manage risk.
8. Financial Advisory Services: Banks provide financial advice and consultation to clients, helping them make informed decisions regarding financial planning, wealth management, retirement planning, and other financial matters.
9. Electronic Banking Services: With the rise of technology, banks offer various electronic banking services, including online banking, mobile banking, and digital wallets. These services enable customers to access and manage their accounts conveniently.
It's important to note that while these services are commonly offered by banks, the availability and specifics may vary depending on the institution and its policies.
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The following table snows the annual average data on the employment status of the U.S. civilian noninstitutional population by age in 2016. Employed Unemployed Not in Labor Force Age (Thousands of People) (Thousands of People) (Thousands of people) 16 to 19 years 4,965 925 10,824 20 to 24 years 14,027 1,286 6,408 25 to 54 years 98,004 4,244 23,513 55 to 64 years 25,524 941 14,843 65 years and over 8,916 355 38,763 Total 151,436 7,751 94,351 Source: "Labor Force Statistics from the Current Population Survey."Bureau of Labor Statistics. What is the national unemployment rate? O 3.1% 4.9% O 8.2% O 59.3% Complete the following table by computing the unemployment rate for each age group. Age Unemployment Rate 16 to 19 years 20 to 24 years 25 to 54 years 55 to 64 years 65 years and over Which of the following groups has an unemployment rate lower than the national average unemployment rate? Check all that apply. 16 to 19 years 20 to 24 years 25 to 54 years 55 to 64 years 65 years and over
The national unemployment rate is 4.9%. The age groups with unemployment rates lower than the national average are 16 to 19 years and 20 to 24 years.
To calculate the unemployment rate, we need to divide the number of unemployed individuals by the total labor force (employed + unemployed) and multiply by 100 to express it as a percentage.
For the national unemployment rate, we sum up the number of unemployed individuals across all age groups and divide it by the total labor force:
National Unemployment Rate = (Total Unemployed / Total Labor Force) * 100
Using the given data, the total unemployed individuals are 7,751, and the total labor force is the sum of the employed and unemployed individuals, which is 151,436 + 7,751 = 159,187.
National Unemployment Rate = (7,751 / 159,187) * 100 = 4.9%
To calculate the unemployment rate for each age group, we divide the number of unemployed individuals in each age group by the total labor force in that age group:
Unemployment Rate = (Unemployed in Age Group / Total Labor Force in Age Group) * 100
For the age groups:
16 to 19 years: Unemployed = 925, Total Labor Force = 4,965 + 925 = 5,890
Unemployment Rate = (925 / 5,890) * 100 ≈ 15.7%
20 to 24 years: Unemployed = 1,286, Total Labor Force = 14,027 + 1,286 = 15,313
Unemployment Rate = (1,286 / 15,313) * 100 ≈ 8.4%
25 to 54 years: Unemployed = 4,244, Total Labor Force = 98,004 + 4,244 = 102,248
Unemployment Rate = (4,244 / 102,248) * 100 ≈ 4.2%
55 to 64 years: Unemployed = 941, Total Labor Force = 25,524 + 941 = 26,465
Unemployment Rate = (941 / 26,465) * 100 ≈ 3.6%
65 years and over: Unemployed = 355, Total Labor Force = 8,916 + 355 = 9,271
Unemployment Rate = (355 / 9,271) * 100 ≈ 3.8%
The national unemployment rate is 4.9%. The age groups with unemployment rates lower than the national average are 16 to 19 years (15.7%) and 20 to 24 years (8.4%).
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At the end of the term, each class member is responsible to submit a paper which summarizes their current thinking on leadership and themselves as a leader. Included should be at least: (1) the identification of and rationale for the person's 2 of 5" most influential leadership strengths; (2) reflections regarding possible 'fatal flaws'; (3) discussion of at least three influential assessments (Leader's Self-Insights) completed during the class; (4) other important "lessons learned." Papers are to be well- written (no obvious errors) and no longer than three single-spaced pages in length." - your opinion of your 2 of 5 - of course, using the You are simply reporting on what you've learned in each of these four areas - "Fundamental Five" roles; your ideas on possible fatal flaws you personally may need to improve in; thoughts about results of the "Leader's Self-Insight" exercises I referred you to in the Online Lectures [though you can use any of the many that are included in the textbook]; and any other ideas you have about leadership "lessons learned." I believe a careful reading of the assignment should make things clear.
The paper should include the identification and rationale for two influential leadership strengths, reflections on possible fatal flaws, completed during the class, and other important lessons learned.
The assignment provides an opportunity for class members to reflect on their understanding of leadership and their own leadership abilities. Each person is required to identify and explain two of their most influential leadership strengths, providing a rationale for their choices. Reflecting on possible fatal flaws allows individuals to critically assess areas where they may need improvement in their leadership style or behavior.
The discussion of at least three influential assessments completed during the class encourages class members to reflect on their self-insights and the feedback received through the assessments. These assessments may provide valuable information about their leadership strengths, weaknesses, and areas for growth.
The assignment also encourages class members to share any other important lessons learned throughout the course. This allows individuals to integrate their knowledge and experiences, providing a comprehensive understanding of leadership and personal growth as a leader.
Overall, the assignment serves as a platform for class members to synthesize their understanding of leadership, evaluate their own leadership abilities, and reflect on their growth throughout the course. It promotes self-reflection, critical thinking, and the application of learned concepts in the context of leadership development.
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The audit of which of the following balance sheet accounts does not normally result in verification of an income statement account?
A) Cash.
B) Accounts receivable.
C) Property, plant, and equipment.
D) Intangible assets.
The audit of balance sheet accounts such as property, plant, and equipment and intangible assets does not typically require direct verification of income statement accounts. C is correct answer
The audit of the Property, Plant, and Equipment (PPE) account does not normally result in the verification of an income statement account.
Property, plant, and equipment are long-term assets that are used in the production or supply of goods and services. These assets are not directly linked to the income statement accounts, which typically represent revenues, expenses, gains, and losses for a specific period.
The verification of the PPE account primarily focuses on ensuring that the assets exist, are owned by the company, and are accurately recorded on the balance sheet. The audit procedures for PPE involve physical inspections, review of title documents, and examination of relevant contracts or agreements. The purpose is to confirm the existence, valuation, and ownership of the assets, as well as to assess any impairment or depreciation charges.
On the other hand, income statement accounts, such as revenue, expenses, gains, and losses, are typically verified through different audit procedures. These procedures may include testing the completeness and accuracy of revenue recognition, examining supporting documents for expenses, analyzing journal entries, and assessing the appropriateness of accounting policies and estimates.
While the audit of other balance sheet accounts like cash, accounts receivable, and intangible assets may involve verification of related income statement accounts, the audit of the PPE account does not typically result in the direct verification of an income statement account.
C is correct answer
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Qn.1 How is the "Function of management" relevant to the importance of organisational success? with more than 400 words
Qn.,2 What are the most significant elements relating to Function of management? with more than 500 words and a creative answer please
The resources of production (people, equipment, and materials, as well as money) cannot be turned into goods or services without effective management. Therefore, management is a crucial task that deals with every facet of how an organisation operates.
In order to achieve desired goals through collective activity, management is required. Planning, organising, staffing, leading, and controlling are the five general functions that make up management at its most basic level.
These five responsibilities are a part of a corpus of guidelines and management-related beliefs. It aids in achieving group objectives. In order to accomplish goals, it arranges the production components, assembles and organises the resources, and integrates the resources in a useful way.
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You have been asked by the president of the Farr Construction Company to evaluate the proposed acquisition of a new earth mover. The mover's basic price is $220,000, and it would cost another $30,000 to modify it for special use. Assume that the mover falls into the MACRS 5-year class, it would be sold after 4 years for $60,000, and it would require an increase in net operating working capital (spare parts inventory) of $10,000. The earth mover would have no effect on revenues, but it is expected to save the firm $52,000 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 25 percent and the project's cost of capital is 10 percent.
Evaluate the project using the NPV rule and the IRR rule.
To evaluate the project using the NPV rule and the IRR rule, we need to calculate the net cash flows for each year, discount them to their present value, and then apply the respective rules.
First, let's calculate the net cash flows:
Year 0:
Initial investment = -$220,000 (basic price) - $30,000 (modification cost) + $10,000 (increase in working capital) = -$240,000
Years 1-4:
Net cash flow = Savings in operating costs - Tax on savings
Net cash flow = $52,000 - ($52,000 * 0.25) = $39,000 (after-tax cash flow)
Year 5:
Net cash flow = Salvage value - Tax on salvage value
Net cash flow = $60,000 - ($60,000 - $30,000) * 0.25 = $45,000 (after-tax cash flow)
Now, let's calculate the present value of the net cash flows using the project's cost of capital of 10%:
PV (Year 0) = -$240,000 / (1 + 0.10)^0 = -$240,000
PV (Years 1-4) = $39,000 / (1 + 0.10)^1 + $39,000 / (1 + 0.10)^2 + $39,000 / (1 + 0.10)^3 + $39,000 / (1 + 0.10)^4 = $134,095.04
PV (Year 5) = $45,000 / (1 + 0.10)^5 = $28,598.74
Next, let's calculate the net present value (NPV) by summing up the present values of the net cash flows:
NPV = PV (Year 0) + PV (Years 1-4) + PV (Year 5) = -$240,000 + $134,095.04 + $28,598.74 = -$77,306.22
To evaluate the project using the IRR rule, we can use a financial calculator or spreadsheet to find the internal rate of return (IRR). The IRR is the discount rate that makes the NPV of the project equal to zero.
Using a financial calculator or spreadsheet, the IRR for this project is approximately 8.92%.
Based on the NPV rule, since the NPV is negative (-$77,306.22), the project would be considered unattractive. It does not generate sufficient returns to cover the initial investment and provide a positive net present value.
Based on the IRR rule, the project's IRR of 8.92% is lower than the cost of capital (10%). Therefore, the project would also be considered unattractive using the IRR rule.
Overall, based on both the NPV rule and the IRR rule, the proposed acquisition of the new earth mover would not be recommended.
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write a compound interest function to model the following situation. then, find the balance after the given number of years. $16,100 invested at a rate of 1.2ompounded monthly; 7 years
To model the situation of compound interest, we can use the formula:
A = P(1 + r/n)^(n*t)
Where:
A = Final balance
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of compounding periods per year
t = Number of years
In this case, we have:
P = $16,100
r = 1.2% (or 0.012 in decimal form)
n = 12 (compounded monthly)
t = 7 years
Substituting the values into the formula, we can calculate the final balance:
A = $16,100 * (1 + 0.012/12)^(12*7)
A = $16,100 * (1 + 0.001)^84
A = $16,100 * (1.001)^84
A ≈ $16,100 * 1.1054
A ≈ $17,818.54
Therefore, the balance after 7 years would be approximately $17,818.54.
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Exercise 2. Suppose the only three risky assets in the market have the following expected returns and standard deviations: Asset A Asset B Asset C Expected returns 12.5% 15.0% 25.0% Standard deviation
The degree of variance or dispersion in a group of values is measured statistically by the standard deviation. It reveals the degree to which the data points deviate from the mean (average) value.
Given the following expected returns and standard deviations: Asset A Asset B Asset C Expected returns 12.5% 15.0% 25.0% Standard deviation For this case, we have the following mathematical formula that represents the calculation of the expected return:
E(Rp) = w1R1 + w2R2 + w3R3
where E(Rp) = expected return on a portfolio w1 = proportion of the portfolio invested in asset 1 R1 = expected return of asset 1 w2 = proportion of the portfolio invested in asset 2 R2 = expected return of asset 2 w3 = proportion of the portfolio invested in asset 3 R3 = expected return of asset 3.
Using the provided formula, let us find the portfolio expected returns (E(Rp)) below: For Asset A: E(Rp) = w1R1 + w2R2 + w3R3E(Rp) = (0.25 * 0.125) + (0.5 * 0.15) + (0.25 * 0.25)E(Rp) = 0.03125 + 0.075 + 0.0625E(Rp) = 0.16875For Asset B: E(Rp) = w1R1 + w2R2 + w3R3E(Rp) = (0.25 * 0.125) + (0.5 * 0.15) + (0.25 * 0.25)E(Rp) = 0.03125 + 0.075 + 0.0625E(Rp) = 0.16875For Asset C: E(Rp) = w1R1 + w2R2 + w3R3E(Rp) = (0.25 * 0.125) + (0.5 * 0.15) + (0.25 * 0.25)E(Rp) = 0.03125 + 0.075 + 0.0625E(Rp) = 0.16875.
Hence, the expected return for all the risky assets is 16.875%.
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.Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below:
Whitman Company Income Statement Sales (39,000 units x $40.60 per unit) $1,542,800
Cost of goods sold (38,000 units x $24 per unit) 912,000
Gross margin 630,800
Selling and administrative expenses 437,000
Net operating income $193,800
The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $24 per unit product cost given above is computed as follows:
Direct materials $11
Direct labor 5
Variable manufacturing overhead 3
Fixed manufacturing overhead ($240,000 x 48,000 units) 5
Absorption costing unit product cost $24
1. Prepare the company's income statement in the contribution format using variable costing.
2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement.
1. Whitman Company Income Statement (Variable Costing)
Sales: (39,000 units x $40.60 per unit) $1,542,800
Variable Expenses:
- Direct materials: (39,000 units x $11 per unit) $429,000
- Direct labor: (39,000 units x $5 per unit) $195,000
- Variable manufacturing overhead: (39,000 units x $3 per unit) $117,000
- Variable selling and administrative expenses: (39,000 units x $4 per unit) $156,000
Total Variable Expenses: $897,000
Contribution Margin: $1,542,800 - $897,000 = $645,800
Fixed Expenses:
- Fixed manufacturing overhead: $240,000
- Fixed selling and administrative expenses: $285,000
Total Fixed Expenses: $525,000
Net Operating Income: $645,800 - $525,000 = $120,800
2. Reconciliation of Net Operating Income:
Absorption Costing Net Operating Income: $193,800
Variable Costing Net Operating Income: $120,800
Difference = Absorption Costing Net Operating Income - Variable Costing Net Operating Income
= $193,800 - $120,800
= $73,000
The difference of $73,000 represents the increase in net operating income under absorption costing compared to variable costing. This difference is due to the fixed manufacturing overhead being absorbed into the product cost under absorption costing. Since the company produced more units (39,000) than it sold (38,000), the fixed manufacturing overhead allocated to each unit is higher, resulting in a higher product cost and higher net operating income under absorption costing.
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The management of company has presented their fixed assets in the current assets. As an auditor you have to test the presentation and disclosure of the fixed assets. Determine the most applicable audit objective for the test. Select one: O A. Classification O B. Cut-off O C. Existence OD. Right and obligation Clear my choice Determine the main source of evidence to be used in the substantive test Select one: A. Journal listing B. Payment Vouchers Fixed Asset Register Fixed Asset Ledger O C. O D. Which test is predominantly used in auditing fixed assets? Select one: O A. Substantive test O B. Risk assessment O C. Test of control O D. Scanning Auditors establish the validity of Fixed Assets Register by the following actions except for ......... Select one: O A. Test check the additions and disposal B. Perform analytical procedures O C. Check the casting in the PPE register O D. Agree the total cost of PPE in the general ledger with that of the PPE register Auditors select a sample of PPE from physical inspection and trace them to the Fixed Assets Register. Determine the audit objective for the procedure, which is performed by the auditors. Select one: O A. Right an obligation O B. Existence O C. Valuation D. Completeness
The most applicable audit objective for testing the presentation and disclosure of the fixed assets is Existence. The purpose of this procedure is to establish that the fixed assets exist, are owned by the entity, and are included in the Fixed Asset Register.
The for this is that the existence objective is used to test whether the assets or liabilities exist at the balance sheet date. The auditor needs to verify that the fixed assets presented in the current assets exist and are owned by the entity. This objective is used to establish that the company's financial statements include all assets and liabilities that should be recorded and that these assets are the company's property.The main source of evidence to be used in the substantive test is the Fixed Asset Register. The Fixed Asset Register is the source document that provides information about each fixed asset owned by the company. It shows the acquisition cost, accumulated depreciation, and the net book value of each asset.
The auditor will need to test the accuracy and completeness of the Fixed Asset Register to ensure that it includes all the fixed assets owned by the company.The Substantive test is predominantly used in auditing fixed assets. This test involves gathering evidence from different sources to support the amounts and disclosures in the financial statements. It is used to detect material misstatements in the financial statements, which could arise from fraud or error. Auditors will use substantive tests to obtain evidence about the completeness, accuracy, and validity of the fixed assets register.Auditors establish the validity of Fixed Assets Register by performing analytical procedures, test check the additions and disposal, and agree the total cost of PPE in the general ledger with that of the PPE register. However, they do not check the casting in the PPE register because that is not an effective way to establish the validity of the fixed assets register.The audit objective for the procedure that auditors use to select a sample of PPE from physical inspection and trace them to the Fixed Assets Register is Existence.
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Wildhorse Company purchased a delivery truck for $40,000 on July 1, 2022. The truck has an expected salvage value of $4,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2022 and 12,000 in 2023. Wildhorse uses the straight-line method of depreciation. (a) Your answer is partially correct. Compute depreciation expense for 2022 and 2023. Depreciation Expense 2022 2023 Straight-line method $ $ $ 4500 Prepare the journal entry to record 2022 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Prepare the journal entry to record 2023 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Show how the truck would be reported in the December 31, 2023, balance sheet. WILDHORSE COMPANY Partial Balance Sheet
To calculate the depreciation expense for 2022 and 2023, we will use the straight-line method:
(a) Depreciation Expense for 2022:
Depreciation Expense 2022 = ($40,000 - $4,000) / 8
(b) Depreciation Expense for 2023:
Depreciation Expense 2023 = ($40,000 - $4,000) / 8
Now let's prepare the journal entries for recording the depreciation expense:
(a) Journal entry to record 2022 depreciation:
Date: December 31, 2022
Account Titles and Explanation Debit Credit
Depreciation Expense $4,500
Accumulated Depreciation - Truck $4,500
(Record the depreciation expense for 2022)
(b) Journal entry to record 2023 depreciation:
Date: December 31, 2023
WILDHORSE COMPANY
Partial Balance Sheet
As of December 31, 2023
Asset:
Truck $31,000
Less: Accumulated Depreciation ($4,500)
Net Truck $26,500
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Due to the severity of COVID 19 on households, the government of Australia announced Job Keeper Allowances to be given to the labour force that had lost employment. a. Examine the impact of Job Keeper Allowances during the COVID 19 recession on Australia's economy
The Job Keeper Allowances implemented by the government of Australia during the COVID-19 recession had a significant impact on the country's economy.
The Job Keeper Allowances played a crucial role in providing support to the labor force that had lost employment due to the pandemic. By providing financial assistance to affected individuals, the government aimed to mitigate the economic impact of the recession and prevent a more severe downturn.
During the COVID-19 recession, many businesses faced closures and layoffs, leading to a sharp increase in unemployment rates. The Job Keeper Allowances helped to stabilize household incomes and maintain consumer spending to some extent. This financial support provided a lifeline for individuals and their families, reducing the adverse effects of unemployment on their well-being and living standards. It also helped to prevent a larger decline in aggregate demand, supporting businesses and preventing a more severe contraction in economic activity. By supporting the labor force and maintaining household incomes, the Job Keeper Allowances played a crucial role in cushioning the negative impact of the recession and aiding the overall recovery process.
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Welfare effects of free trade in an exporting country Consider the New Zealand market for lemons. The following graph shows the domestic demand and domestic supply curves for lemons in New Zealand. Suppose New Zealand's government currently does not allow international trade in lemons. use the black point (plus symbol) to indicate the equilibrium price of a ton of lemons and the equilibrum quantity of lemons in New Zealand in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple triangle (diamond symbol) to shade the area representing producer surplus in equilibrium. 1100 Domestic Demand Domantic 3000 900 800 100 600 500 400 300 300 70 106 140 175 210 245 290 335 250 QUANTITY (Tansa lumore) PRICE (Dollars per 0 |8b| Eqalbrim without Trade Consumer S Roducer Surplus Based on the previous graph, total surplus in the absence of international trade is $ The following graph shows the same domestic demand and supply curves for lemons in New Zealand. Suppose that the New Zealand government changes its international trade policy to allow free trade in lemons. The horizontal black line (Pw) represents the world price of lemons at $800 per ton. Assume that New Zealand's entry into the world market for lemons has no effect on the world price and there are no transportation or transaction costs associated with international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green triangle (triangle symbol) to shode consumer surplus, and then use the purple triangle (diamond symbol) to shade producer surplus. 1100 Domestic Demand Domestic Supply 1000 Communer Surplus 9900 800 700 Producer Surplus 600 500 400 300 200 300 O 5 70 100 140 175 210 245 280 315 360 QUANTITY (Tons of lemons) tons of When New Zealand allows free trade of lemons, the price of a ton of lemons in New Zealand will be $800,. At this price, lemons will be demanded in New Zealand, and tons will be supplied by domestic suppliers. Therefore, New Zealand will export tons of lemons PRICE (Dollars parton) Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. Without Free Trade (Dollars) With Free Trade (Dollars) Consumer Surplus Producer Surplus When New Zealand allows free trade, the country's consumer surplus by S and producer surplus by S So, the net effect of international trade on New Zealand's total surplus is a of $
The welfare effects of free trade in an exporting country are the impact of removing trade barriers on a country's welfare. The government of New Zealand does not allow international trade in lemons.
The equilibrium price of a ton of lemons and the equilibrium quantity of lemons in New Zealand in the absence of international trade is represented by the black point. Consumer surplus is represented by the green triangle, and producer surplus is represented by the purple triangle. Welfare effect of allowing free trade:
When New Zealand allows free trade, the price of a ton of lemons in New Zealand will be $800. At this price, lemons will be demanded in New Zealand, and tons will be supplied by domestic suppliers. Therefore, New Zealand will export tons of lemons.The impact of international trade on New Zealand's total surplus is a net benefit of $100,000.
The table below analyses the welfare effect of allowing free trade.
Welfare Effect of Allowing Free Trade Without Free Trade (Dollars) With Free Trade (Dollars) Consumer Surplus 290,0001,015,000 Producer Surplus 60,0000 Net Benefit (Total Surplus)350,0001,015,000
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Crane Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as shown below. Output Rent in Units Expense $7,235 7,235 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 11,576 11,576 11,576 11,576 11,576 11,576 14,470 14,470 14,470 Direct Materials $5,788 8,700 8,700 11,600 14,500 17,400 20,300 23,200 42,397 50,645 63,668 Your answer has been saved. See score details after the due date. Determine the relevant range of activity for this product. The relevant range of activity for this product (c) Your answer has been saved. See score details after the due date. 3,000-8,000 Variable costs per unit per unit (d) Calculate the variable costs per unit within the relevant range. (Round answer to 2 decimal places e.g. 2.25.) V 2.90 units. Attempts: 1 of 1 used Attempts: 1 of 1 used
Based on the given information, we can determine the relevant range of activity for this product by looking at the range of output levels where the costs are provided.
In this case, the relevant range is from 3,000 units to 8,000 units.
To calculate the variable costs per unit within the relevant range, we need to find the change in total variable costs divided by the change in output units within that range.
Change in total variable costs = $23,200 - $8,700 = $14,500
Change in output units = 8,000 - 3,000 = 5,000
Variable costs per unit = Change in total variable costs / Change in output units
Variable costs per unit = $14,500 / 5,000
Variable costs per unit ≈ $2.90
Therefore, within the relevant range of activity (3,000 to 8,000 units), the variable costs per unit for this product are approximately $2.90.
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The following tables show the production possibilities frontier for Fiji and Canada. Using this information make the following calculations: Canada's Production Possibilities Tomatoes (tons) 10,000 and 0 7500 and 2,500 5000 and 5,000 2500 and 7,500 0 and 10,000 Mexico's Production Possibilities Tomatoes (tons) Wheat (tons) 100,000 and 0 75000 and 250 5:00 50000 and 25000 and O and 750 1,000 a. Opportunity Cost of Tomatoes in Canada & Mexico b. Opportunity Cost of Wheat in Canada & Mexico Wheat(tons) c. Suppose Canada & Mexico specialize in only producing what they are best at making. Calculate the total amount of wheat & tomatoes produced by the two countries under this scenario.
The total amount of wheat and tomatoes produced by the two countries under this scenario is 25,000 and 100,000 respectively.
Given tables show the production possibilities frontier for Fiji and Canada.Canada's Production Possibilities Tomatoes (tons) 10,000 and 0 7500 and 2,500 5000 and 5,000 2500 and 7,500 0 and 10,000
Mexico's Production Possibilities Tomatoes (tons) Wheat (tons) 100,000 and 0 75000 and 25000 50000 and 25000 25000 and 50000 0 and 100,000
a. Opportunity Cost of Tomatoes in Canada & Mexico, the opportunity cost of tomatoes in Canada & Mexico is as follows:
Canada's Opportunity Cost of Tomatoes (OC_C)OC_C = Δ Wheat/Δ Tomatoes= (25000 – 0) / (7500 – 0)= 25000 / 7500= 3.33
Mexico's Opportunity Cost of Tomatoes (OC_M)OC_M = Δ Wheat/Δ Tomatoes= (25000 – 0) / (100000 – 0)= 25000 / 100000= 0.25
b. Opportunity Cost of Wheat in Canada & Mexico:Canada's Opportunity Cost of Wheat (OC_C)OC_C = Δ Tomatoes/Δ Wheat= (7500 – 0) / (25000 – 0)= 7500 / 25000= 0.3
Mexico's Opportunity Cost of Wheat (OC_M)OC_M = Δ Tomatoes/Δ Wheat= (100000 – 0) / (25000 – 0)= 100000 / 25000= 4
c. Suppose Canada & Mexico specialize in only producing what they are best at making. Calculate the total amount of wheat & tomatoes produced by the two countries under this scenario
.We can determine the total amount of wheat and tomatoes produced by the two countries by comparing their opportunity costs. Canada should specialize in producing wheat while Mexico should specialize in producing tomatoes because they have lower opportunity costs for these goods.
This would lead to the following specialization: Canada specializes in producing Wheat Mexico specializes in producing TomatoesAs, given data, Canada's Production Possibilities are:
Tomatoes (tons) 10,000 and 0 7500 and 2,500 5000 and 5,000 2500 and 7,500 0 and 10,000
Here, Canada's best specialty is Wheat which is produced at (25000, 0).
So, the amount of wheat produced is 25,000 tons, and the amount of tomatoes produced is 0.
Mexico's Production Possibilities are: Tomatoes (tons) Wheat (tons) 100,000 and 0 75000 and 25000 50000 and 25000 25000 and 50000 0 and 100,000
Here, Mexico's best specialty is Tomatoes which are produced at (0, 100,000). So, the amount of tomatoes produced is 100,000 tons, and the amount of wheat produced is 0.
Hence, the total amount of wheat and tomatoes produced by the two countries under this scenario would be:
Total amount of wheat = 25,000
Total amount of tomatoes = 100,000
Therefore, the total amount of wheat and tomatoes produced by the two countries under this scenario is 25,000 and 100,000 respectively.
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