A firm has provided you with the following information:
Output 30
Variable Cost $1,900
Fixed Cost $120
Marginal Cost $50
Price $50
a. What is the firm's short-run profit if they produce using the MC=MR rule?
b. What is the firm's short-run profit if they produce nothing?
c. What will be the firm's production decision in the short-run?
1. Shutdown
2. Exit
3. Operate
Answer:
(a) Output produced = 30 , Price = $50
Total revenue = Output produced * Price = 30 units * $50 = $1,500
Total Cost= Variable cost + Fixed cost = $1900 + 120 = $2020
At profit maximization or loss minimization point, MR = MC.
Corresponding to an output level of 30, MR=MC =$50
Note: Price is constant at $50. So, the marginal revenue will be $50 at each level of output
Profit = Total revenue - Total Cost.
Profit = $1500 - $2020
Profit = -$520.
The firm's short-run profit is -$520 if they produce using MR=MC.
(b) If a firm produces nothing, then a firm has to bear a fixed cost of $120. It means there is a loss of $120 or a profit of -$120. So, short-run profit is -$120 if they produce nothing.
(c) In the short run, if the firm produces then bear a loss of $520. if a firm produces nothing then bear a loss of $120. So, it is better to shut down the production in the short run in order to minimize the loss of the firm.
Which of the following statements accurately describe the phases of a business cycle?
A. A contraction phase is when an economy exhibits decreasing levels of production and consumption.
B. A period of expansion is when an economy exhibits decreasing levels of production and spending.
C. A trough occurs at the end of the contraction phase and the beginning of the expansion phase
D. A peak level of business activity occurs at the end of the expansion phase and the beginning of the contraction phase.
Answer:
Option A
Explanation:
In simple words, contraction relates to a period of the market cycle throughout which the market is in recession as a group When the economic cycle rises, a recession usually occurs, just before it reaches a trough. A contraction is triggered by three kinds of occurrences. We are talking of a sharp spike in borrowing rates a banking crash, or uncontrolled inflation . Paranoia and anxiety replace assurance.
In 2018, Borland Semi-conductors entered into the transactions described below. In 2015, Borland had issued 195 million shares of its $1 par common stock at $39 per share.
Required:
1. On January 2, 2018, Borland re-acquired 12 million shares at $37.50 per share.
2. On March 3, 2018, Borland re-acquired 12 million shares at $41 per share.
3. On August 13, 2018, Borland sold 1 million shares at $47 per share.
4. On December 15, 2018, Borland sold 2 million shares at $41 per share.
Solution :
Serial No. Date given Journal Debit Credit
1). 02 Jan, 2018 Common stock $ 12
Paid-in-capital
excess of the par $ 456
Paid-in-capital
share repurchased $ 18
Cash $ 450
2). 03 March, 2018 Common-stock $ 12
Paid-in-capital
excess of the par $ 456
Paid-in-capital
share repurchased $18
Retained earnings $ 6
Cash $ 492
3). 15 Dec, 2018 Cash $ 82
Common-stock $ 2
Paid-in-capital
excess of the par $ 80
In the case of an expansionary_____policy, the interest rate rises, while in the case of an expansionary _____ policy, the interest rate falls.
Select one:
a. fiscal; monetary
b. monetary, monetary
c. monetary, fiscal
d. fiscal; fiscal
= fiscal; monetary
With an expansionary fiscal policy, the interest rate rises, while with an expansionary monetary policy, the interest rate falls.
What is an Expansionary fiscal & monetary policy?This is when an increases in money supply is stimulated by raising spending or cut taxes while the latter is when the cost of borrowing i reduced to stimulate an economy.
Therefore, the Option A is correct.
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13.) An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 6% yields, what yield must municipals offer for the investor to prefer them to corporate bonds
Answer:
the yield that must offer for the investor in order to prefer them is 4.2%
Explanation:
The computation is shown below:
The after tax yield is
= Corporate bond yield × (1 - tax rate)
= 6% × (1 - 0.30)
= 6% × 0.70
= 4.2%
hence, the yield that must offer for the investor in order to prefer them is 4.2%
The same is relevant
if quantity demamded is completely unresponsive to changes in price ,demand is what?
Answer:
If quantity demanded is completely unresponsive to changes in price, demand is Perfectly inelastic.
Explanation:
Perfectly inelastic demand means that quantity demanded remains the same when price increases or decreases. Consumers are completely unresponsive to changes in price.
I hope it's helpful
Which professional has helped Jennifer in this example?
Jennifer bought a new smart phone from a local store that sells electronic products. After a week, she started experiencing problems with the
phone's display screen. She went back to the store and spoke to its ___
representative, who replaced the product and
apologized for the inconvenience.
Answer:
would it be sales representative since they were only able to replace the device and apologize
Answer:
customer service
Explanation:
I'm smart and got it right on my test
Which of the following is/are inconsistent with the semi-strong form of the efficient market hypothesis? [I] Significant non-random price movements [II] Price overreaction to the public release of new information [III] Superior performance of professional traders [IV] Abnormal profits from illegal insider trading
A. I and III
B. II and IV
C. I and II
D. All are inconsistent with the semi-strong form of the EMH
Answer:
C. I and II
Explanation:
Semi strong form of efficient market hypothesis is a situation where stock prices adjust quickly to any new public information that circulates in the market. It assumes that stock prices incorporates the effect of all information which is publicly available in the market.
Identify the importance of accounting by selecting the statement that is correct below. Multiple choice question. Accounting information helps users make business and financial decisions. Accounting is a system that identifies, records and communicates an organization's business activities. Accounting information is primarily used only at the end of a year when tax returns and financial statements are prepared.
Answer:
Accounting information helps users make business and financial decisions.
Explanation:
Users of accounting information are divided into :
Internal users External usersInternal users include : owners, managers, employees
External users include : shareholders, tax authority, regulatory bodies
Based on the information contained in the financial information a shareholder can decide if to invest in a company or not to.
Also, mangers can decide to invest in new ventures based on the information on profitability contained in the financial statements.
The importance of accounting from the statements is A. Accounting information helps users make business and financial decisions.
Why is accounting important ?Accounting plays a crucial role in providing relevant and reliable information to users for making informed business and financial decisions. It involves the identification, recording, and communication of an organization's business activities, which helps users understand the financial health and performance of the entity.
Accounting information is used not only at the end of the year for tax returns and financial statements but also on an ongoing basis to support decision-making, budgeting, forecasting, strategic planning, and evaluating the financial position and performance of the organization.
In conclusion, option A is correct.
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