What is the effect of contractionary fiscal policy in the short run?​

The demand schedule is first rearranged as in the attached photo.

The questions can be answered using the following midpoint method formulae:

Price elasticity of demand = Change is quantity / Change in price …………… (1)

Income elasticity of demand = Change is quantity / Change in income …………(2)

Where:

Change in quantity = (New quantity - Old quantity) / ((New quantity + Old quantity)/2)

Change in Price = (New price - Old price)/ ((New price + Old price)/2)

Change in income = (New income - Old income)/ ((New income + Old income)/2) =

Using the formulae, we have:

a(i) Price elasticity of demand when income is $10,000

We have:

Change in quantity = (New quantity - Old quantity) / ((New quantity + Old quantity)/2) = (32-40) / ((32+40)/2) = -0.222222222222222

Change in Price = (New price - Old price) / (New price + Old price)/2) = (10-8) / ((10+8)/2) = 0.222222222222222

Price elasticity of demand when income is $10,000 = Change is quantity / Change in price = -0.222222222222222 / 0.222222222222222 = -1

a(ii) Price elasticity of demand when income is $12,000

We have:

Change in quantity = (New quantity - Old quantity) / ((New quantity + Old quantity)/2) = (45-50) / ((45+50)/2) = -0.105263157894737

Change in Price = (New price - Old price) / (New price + Old price)/2) = (10-8) / ((10+8)/2) = 0.222222222222222

Price elasticity of demand when income is $12,000 = Change is quantity / Change in price = -0.105263157894737 / 0.222222222222222 = -0.473684210526316, or -0.47 approximately

b(i) Income elasticity of demand as income increases from $10,000 to $12,000 if the price is $12

Change in quantity = (New quantity - Old quantity) / ((New quantity + Old quantity)/2) = (30 - 24) / ((30 + 24)/2) = 0.222222222222222

Change in income = (New income - Old income)/ (New income + Old income)/2) = (12,000 – 10,000)/ ((12,000 + 10,000)/2) = 0.181818181818182

Income elasticity of demand = Change is quantity / Change in income = 0.222222222222222 / 0.181818181818182 = 0.81818181818182, or 0.82 approximately

b(ii) Income elasticity of demand as income increases from $10,000 to $12,000 if the price is $16

Change in quantity = (New quantity - Old quantity) / ((New quantity + Old quantity)/2) = (12 - 8) / ((12 + 8)/2) = 0.40

Change in income = (New income - Old income)/ (New income + Old income)/2) = (12,000 – 10,000)/ ((12,000 + 10,000)/2) = 0.181818181818182

Income elasticity of demand = Change is quantity / Change in income = 0.40 / 0.181818181818182 = 2.20

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a. use the midpoint method to calculate your price elasticity of demand as the price of dvds increases from $8 to $10 if (i) your income is $10,000 and (ii) your income is $12,000 : -1

Explanation:

Suppose that your demand schedule for DVDs is as follows:

price

$8

10

12

14

16

quantity demanded (income = $10,000)

40 pizza

32

24

16

8

quantity demanded (income = $12,000)

50 pizza

45

30

20

12

a. use the midpoint method to calculate your price elasticity of demand as the price of dvds increases from $8 to $10 if (i) your income is $10,000 and (ii) your income is $12,000.

Price elasticity of demand   (Income $10,000) =  Quantity present - quantity previous  / (quantity present + quantity previous /2) divide with (Price present - price previous /  (price present + price previous /2))

quantity present - quantity previous / (quantity present + quantity previous/2) = 32-40 / ((32+40)/2)  = 9/36 = -0.2222

(Price present - price previous /  (price present + price previous /2))

= 10-8 / ((10+8)/2)  = 2/9  = 0.2222

Price elasticity of demand   (Income $10,000) =  Quantity present - quantity previous  / (quantity present + quantity previous /2) divide with (Price present - price previous /  (price present + price previous /2)) = -0.2222 /  0.2222 = -1

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Answer:B -

Explanation:Depreciation is added back as an adjustment to the net income in the operating activities section.

Answer:

The correct answer is letter "B": is added back as an adjustment to Net Income in the operating activities section.

Explanation:

Since net income is a starting point for calculating cash flows from operating activities, depreciation costs must be added back to net income if the method being used is the indirect process. Therefore, depreciation spending is recorded in the cash flow statement.

Answer: b. A study of the situation

Explanation: The problem-based ideation process is characterized by a workflow that begins with the study of a situation, to use of various techniques of problem identification, to screening of the resulting problems, and ends in development of concept statements for final evaluation. The aim is to generate a large quantity of ideas that can then filtered through and the best, most practical or most innovative solutions are selected.

Answer:

Structural policy

Explanation:

This is an example of what is known as structural policy.

There are times where the problem of an economy get to be more and also last longer than inadequate demand. This problem can be caused by government policies or sometimes private practices that cause an impediment on the efficient production of goods and Also services. In other to fix a problem such as this, changes have to be made to the economy. Such changes is what is regarded as structural policy.

Answer:

actual variable expenses were higher than the flexible budget variable expenses.

Explanation:

A flexible budget projects budget data (revenue and expenses) based on various or multiple levels of business activities, such as production sales.

Also, a flexible budget variance gives the difference between the output resulting from a flexible budget and the actual outputs.

A variance can either be favorable or unfavorable. An unfavorable flexible budget variance for variable expenses would indicate actual variable expenses were higher than the flexible budget variable expenses.

Hence, If a company's actual net income is lower than it's planned, the variance is said to be unfavorable. Thus, higher costs and expenses would result in a unfavorable variance while higher revenues result in a favorable variance.

A quantity variance and price variance can be used to measure the direct materials flexible budget variance.

Answer:

$2,034,500 ; A

Explanation:

In this question, we are asked to calculate cost estimate.

One of the methods which we can use to do this is the cost factor technique.

Mathematically, the estimated total cost will be;

Ct = hCe

Where Ce refers to cost at major equipment and h is the overall cost factor.

From the question, we can identify the following;

Ce is $650,000 while h = 1.82 + 1 + 0.31 = 3.13

Inputing these values in the formula, we have;

Ct = $650,000 * 3.13 = $2,034,500

Answer:

a) 2, 034,500

Explanation:

the explanation is given in the file attached