Assume that demand for a service depends upon price and income, where the price elasticity of demand is Ep = –0.6 and income elasticity is Ey = 1.2. If price falls by 4% and income rises by 2%, the quantity demanded of the service will _____. (a)-falls by 2.4%
(b)-falls by 9.6%
(c)-not affected since the price change and income change will exactly offset one another.
(d)-increase by 6%
(e)-increase by 4.8%
Answers
Answer:
Increase by 4.8%
Explanation:
The 4% price reduction will cause an increase in demand by 2.4%.
The 2% rise in income will cause an increase in demand by 2.4%
If we take into account both variations and add them, we have an increase in demand by 2.4%+2.4% = 4.8%
Related Questions
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,556,000 Variable expenses 591,640 Contribution margin 964,360 Fixed expenses 1,061,000 Net operating income (loss) $ (96,640) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 386,000 $ 600,000 $ 570,000 Variable expenses as a percentage of sales 44 % 38 % 34 % Traceable fixed expenses $ 297,000 $ 331,000 $ 208,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 17%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented
9. Two countries: US and Mexico. Two goods: Airplane and car. A US worker's MPL is 20 times higher than a Mexican worker in making an airplane. A US worker's MPL is 5 times higher than a Mexican worker in making a car. Which country has absolute advantage in making cars and why
Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves each 8-hour shift. If the productivity is increased by 10%, it would then be A) 180 valves/hr B) 200 valves/hr C) 220 valves/hr D) 880 valves/hr E) 1760 valves/hr
During October, Crane Company experiences the following transactions in establishing a petty cash fund. Oct. 1 A petty cash fund is established with a check for $146.00 issued to the petty cash custodian. Oct. 31 A check was written to reimburse the fund and increase the fund to $196.00. A count of the petty cash fund disclosed the following items: Currency $59.00 Coins 2.07 Expenditure receipts (vouchers): Supplies $24.73 Miscellaneous items 15.03 Postage 38.33 Freight-Out 5.43Journalize the entries in october that pertain to the petty cash fund.
O Tooling
O Money
O Buildings
O Employees
Answers
Answer: employees
Explanation:
Answers
Answer:
B. 2,600 to 2,000.
Explanation:
tax revenue = units x tax rate
units = tax revenue / tax rate = 6,000/3 = 2,000
2,000 will be the quantity after taxes.
6000 goverment revenue - 3900 consumer surplus - 3000 producer surplus
900 deathweight loss
(tax x ↓unit)/2 = deathweight loss
(3 x ↓unit)/2 = 900
(3 x ↓unit) = 900 *2
↓unit = 1800/3 = 600
It decrease to 2000 from 2600
Final answer:
A $3 per unit tax creates a wedge between the price paid by consumers and the price received by producers, representing a production cost increase. This results in a leftward shifted supply curve, with reduced consumer and producer surplus. The burden of the tax is shared, decreasing the equilibrium quantity of goods.
Explanation:
When a $3 per unit tax is imposed on a good, the government creates a wedge between the price paid by consumers and the price received by producers. The distance between these prices equals the tax rate.
The new market price is the price paid by consumers, but sellers receive less per unit sold as they pay the difference (tax) to the government. This tax is akin to an increase in production cost, symbolized by a leftward shift of the supply curve. The new supply curve intercepts the demand at the new quantity.
The tax revenue is found by multiplying the tax per unit by the total quantity sold. The tax incidence, or burden, is shared by both consumers and sellers. In this case, the consumers' surplus decreased by $3,900 and the producers' surplus decreased by $3,000, causing a total tax revenue of $6,000 and a decrease in the equilibrium quantity of goods.
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Answers
Answer:
Beverages, publishing, power utilities
Explanation:
The secondary industry is involved in the conversion of raw materials into goods
The primary industry is involved in the extraction of raw materials from the ground. E.g. fishing ,mining
The tertiary industry is involved in the provision of services. E.g. financial services
I hope my answer helps you
b. On February 1, Trolley received $8,000 for a four-year technical service contract. Trolley is performing the services evenly over the four-year period. The company credited a liability account, Unearned Service Revenue, on February 1.
c. On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note.
d. The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday.
Required:
Prepare the adjusting entries for December 31.
Answers
Answer: See explanation
Explanation:
It should be noted that adjusting entries are normally made at the conclusion of an accounting period so that the income and expenditure will be allocated to the particular period when they took place.
Prepaid rent is calculated as:
= 2660 × (36-5)/36
= 2660 × 31/36
= 2290.56
Unearned revenue:
= 8000 × 11/48
= 1833.33
Accrued interest:
= 3400 × 12% × 8/12
= 3400 × 0.12 × 8/12
= 272
Salary expense:
= 2500 × 4/5
= 2000
The adjusting entry has been attached.
Final answer:
The adjusting entries for year-end include recognizing the appropriate portion of prepaid rent, recognizing earned portion of unearned revenue, recording interest receivable and interest revenue, and adjusting for payroll expense and payable.
Explanation:
The adjustments for Trolley Inc. for year-end can be prepared as follows:
- August 1: Trolley Inc. paid $2,660 for a three-year lease. The total expense is spread evenly over the three years, so we recognize 5/36 of the cost this year. That's $2,660 x 5/36 = $367.78. So, the adjusting entry is: Debit Prepaid Rent $367.78 and Credit Rent Expense $367.78.
- February 1: Trolley received $8,000 for a four-year technical service contract. The contract is being delivered evenly over four years, so 11/48 of the revenue is recognized this year. That's $8,000 x 11/48 = $1833.33. Therefore, the adjusting entry is: Debit Unearned Service Revenue $1833.33 and Credit Service Revenue $1833.33.
- May 1: Trolley loaned $3,400 to another company at 12% interest per annum. The interest for the 8 months is $3,400 x 12% x 8/12 = $272. Hence, the adjusting entry is: Debit Interest Receivable $272 and Credit Interest Revenue $272.
- December 31: Trolley pays $2,500 weekly (five-day) payroll. Since December 31 falls on a Thursday, there's one day of expenses to adjust. Thus, the adjusting entry is: Debit Wage Expense $500 and Credit Wage Payable $500.
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Answers
Answer: c. 5 bolts.
Explanation:
From the graph we see that the opportunity cost of making 80 nails is 20 bolts.
Opportunity cost of making 1 nail is;
80/80 : 20/80
1 : ¼
If 1 nail has an opportunity cost of ¼ bolts then making 20 extra nails would cost;
= 20 * ¼
= 5 bolts.
Answers
Answer:
B. will increase
Explanation:
Assuming that 50 firms in a monopolistically competitive industry in country A and 50 firms in the same monopolistically competitive industry in country B. If country A and country B engage in international trade, we expect that the total number of firms in this industry will increase .Because after trade, assuming firms in both countries make economic (excess) profits, this will attract entry of other firms into the industry in both markets. So, number of firms will increase.The correct answer is Option (B).