Answer:
option (D) $1,660,000
Explanation:
Data provided in the question:
General obligation bonds = $1,500,000
Compensated absences = $120,000
Salaries payable = $40,000
Now,
The amount of liabilities that should be reported in the governmental activities column of the government-wide statement of net position
= General obligation bonds + Compensated absences + Salaries payable
= $1,500,000 + $120,000 + $40,000
= $1,660,000
Hence,
The answer is option (D) $1,660,000
Shondra McDonald, a marketing manager at a hearing aid manufacturing firm, is asked to review the marketing opportunities of her company in a foreign market. She is aware that she can modify certain elements of the marketing environment to suit the foreign market needs. She focuses her attention on the uncontrollable factors that might affect the firm’s business prospects. Which uncontrollable element is most likely to affect the company’s business prospects in the foreign market?
Answer: Government policy
Explanation:
A firm operation in a foreign market is usually affected by uncontrollable factors in the foreign market but the most likely to affect the firm is the goverments policy on foreign firm.
A government might vary it's duties on foreign firm or it's products or a total ban on the firm operation in the foreign market.
There are others like natural disasters but the company can get information on such based on precedence of such occurrence in the foreign country or as regards forecast on such.
Your employer has given you the task of increasing overall production within your department using the same number of permanent employees but no additional hours to complete the work. Which of the following is a possible solution?
1. Cutting vacation and sick time
2. Eliminating breaks and lunches
3. Incentivizing your employees to work harder
4. Turning a blind eye while employees work overtime
Answer:
3. Incentivizing your employees to work harder
Explanation:
Increasing production is the same as increasing productivity. This measures the ratio of output to input. It can improve by increasing outputs while keeping inputs constant or by reducing inputs while keeping outputs constant. The former applies to this case as the employees provide labour input which is constant but with an aim to increase production. You will therefore choose an option that would result in more output; that is incentivizing your employees to work harder.
To increase production with the same workforce, incentivizing employees to work harder by offering rewards or bonuses can improve morale, job satisfaction and productivity without needing extra manpower or hours.
Explanation:The task is to increase production with the same workforce and hours, so an effective way could be to incentivizing your employees to work harder. Options such as cutting vacation and sick time, eliminating breaks and lunches, or having employees work overtime without acknowledging it all lead to potential worker burnout and unethical practices. However, incentivizing workers can involve offering performance bonuses, public recognition, career advancement opportunities, or even non-monetary rewards for meeting or exceeding certain performance metrics or achieving specific goals. This can help boost morale, improve job satisfaction, and increase productivity without needing additional manpower or hours.
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Richard's job has a compa-ratio of 0.85. What does this ratio tell about Richard's pay rate?
A. It is highly competitive with the market.
B. It is not competitive with the market.
C. There is no way to judge its competitiveness.
D. You need more information to judge it.
Answer:
B. It is not competitive with the market.
Explanation:
If Richard's job has a compa-ratio of 0.85, then It is not competitive with the market.
What is the relationship between a monopolist's demand curve and the market demand curve? A. A monopolist's demand curve is greater than the market demand curve. B. A monopolist's demand curve is the same as the market demand curve. C. A monopolist's demand curve is upward sloping and the market demand curve is downward sloping. D. The market demand curve has twice the slope of a monopolist's demand curve. E. The market demand curve is the sum of the demand curves for all firms in the market. What is the relationship between a monopolist's demand curve and its marginal revenue curve? A. A monopolist's marginal revenue curve has twice the slope of its demand curve due to diseconomies of scale. B. A monopolist's demand curve is the same as its marginal revenue curve. C. A monopolist's marginal revenue curve has twice the slope of its demand curve, because to sell more output, a monopoly must lower price. D. A monopolist's demand curve is downward sloping and its marginal revenue curve is upward sloping. E. A monopolist's marginal revenue curve has half the slope of its demand curve, because to sell more output, a monopoly must lower price.
Answer:
B) a monopolist's demand curve is the same as the market demand curve
Explanation:
The demand curve is downward sloping for both monopolies and competitive markets. Rational consumers will always buy larger quantities of products or services when their prices are lower, and inversely will buy less when the price if higher. This applies to all types of markets except monopsonies (a lot of suppliers and only one consumer).
which of the following does not affect the reject rates at a company's production facilities
a. The size of the incentive payment per non-defective pair produced
b. Spending for TQM/Six Sigma quality control efforts
c. The number of models/styles comprising the company's product line
d. The installation of plant upgrade C
e. Spending for best practices training
The number of models/styles comprising the company's product line does not affect the reject rates at a company's production facilities.
Explanation:The correct answer is c. The number of models/styles comprising the company's product line. The reject rates at a company's production facilities are not affected by the number of models/styles comprising the product line. The other options listed in the question can potentially affect the reject rates.
For example, option a. The size of the incentive payment per non-defective pair produced can motivate workers to produce higher-quality products, which can help lower reject rates. Option b. Spending for TQM/Six Sigma quality control efforts can improve quality processes and reduce defects, leading to lower reject rates. Option e. Spending on best practices training can also help improve the skills and knowledge of the employees, contributing to lower rejection rates.
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The number of models or styles in a company's product line does not inherently affect reject rates at a company's production facilities. Reject rates are more directly impacted by factors such as production technology, quality control efforts, and best practices training.
The question is asking which of the listed options does not affect the reject rates at a company's production facilities. Reject rates are influenced by various factors within manufacturing and quality control processes. Factors such as incentive payments, quality control efforts like TQM/Six Sigma, plant upgrades, and best practices training can significantly affect product quality and therefore the rejection rate of products. However, the number of models or styles in a company's product line by itself does not inherently affect reject rates. It is the processes and controls in place at the production facilities that matter more for keeping reject rates low.
An improvement in production technology often leads to better quality products, just as a reduction in production risk can result in fewer rejected items. Implementing best practices and quality management systems such as Six Sigma also plays a substantial role in reducing errors and defects in manufacturing processes. Contrary, the variety of models or styles does not directly impact the reject rates; these are more related to design and market strategy considerations.
Which of the following is true concerning incentive pay?
1.The award is earned only when the predetermined work objective is totally completed.
2. It motivates employees to be more productive, but does little to control payroll costs.
3. Awards are granted as one-time payments. Incentive levels are generally subjective in nature.
The answer is:
1. The award is earned only when the predetermined work objective is totally completed.
Hope this helps. XD
If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear production possibility frontier for his farm, the opportunity cost of producing an additional pound of potatoes is ________ pound(s) of cabbage.Choose one answer.a. 1/2b. 2c. 100d. 200
Answer:
B) 2
Explanation:
Since Sam MacDonald's faces a linear production possibility frontier and can produce 200 pounds of cabbages or 100 pounds of potatoes, then he can produce 2 pounds of cabbage for every pound of potato produced (= 200 pounds / 100 pounds).
For example, if he needed to produce 10 pounds of potatoes, then his opportunity cost would be 20 pounds of cabbages.
The unemployment rate that is consistent with full employment is known as ___________.
Answer:
Natural rate of unemployment.
Explanation:
Unemployment rate is one the major economic indicators used to measure the performance of an economy. Unemployment describes the situation where persons who are willing, ready and able to work cannot find one. To track the number of persons in this category , economists compute the unemployment rate.
There are three types of unemployment.
1. Frictional unemployment: The length of time for which people remain out of jobs as they transit from one job to another. In other words, landing a job is not instantaneous; it takes time.
2. Structural unemployment: this occurs when there are changes in the methods and processes by which goods and services are produced. Here, people remain out of jobs because there is now a mismatch between the skills they possess and that required by employers due to changes in the economy.
For example, the adoption of technology to automate production would mean some factory workers losing their jobs.
3. Cyclical unemployment: This associated with movements of the real output( real GDP) around the long run full employment level. This fluctuation is referred to as business cycle- either a boom or a recession
Where people are without jobs due to recession(negative output growth), it is called cyclical unemployment.
Natural rate of unemployment is the sum of the frictional and structural. It is the unemployment rate where an economy is achieving the full employment output. The full employment level of output is the amount of real GDP achieved where an economy is operating using all of its productive resources efficiently
Actual rate of unemployment represents the amount of unemployed people at particular point in time. it is determined by dividing the number of people unemployed by the labour force.
Relationship between Natural rate and Actual rate of unemployment.
Where an economy is operating at the full employment level of output the actual rate of unemployment is equal to the natural rate. However, during recession the actual rate is higher than the natural rate, but less that the natural rate during a boom. Cyclical unemployment increases the actual unemployment rate above the natural rate during recession.
It is important to note that there will be some amount of unemployment rate even if the economy is operating at the efficient level- i.e the full employment output.
The unemployment rate that is consistent with full employment is known as natural rate of unemployment
Tool Manufacturing purchased inventory for $5,300 and also paid a $260 freight bill. Tool Manufacturing returned 45% of the goods to the seller and later took a 2% purchase discount. Assume Tool Manufacturing uses a perpetual inventory system. What is Tool Manufacturing's final cost of the inventory that it kept? (Round your answer to the nearest whole number.)
Answer:
$ 3,116.7 final cost of the inventory
Explanation:
asset enter the accounting as the sum of all incurred cost which were necessary to obtain it. In this case we got:
5,300 invoice cost
- 2,385 return goods
2,915 nominal after return, subject to discount of 2%
- 58.3 discount granted of 2%
2,856.7 final amount to supplier
260 for fregith fees
3,116.7 final cost of the inventory
Allie works for a large manufacturing firm and enjoys the feeling of being a "cog" in the machine and being able to leave work behind when she leaves the plant. When she is forced to participate in a new workplace democracy program, she thinks, "If this is democracy, how come they can make me go to these meetings." What paradox of participation does Allie illustrate?
Answer:
Paradox of Power
Explanation:
A paradox is a self-contradicting statement or act that seems contrary to what it actually is.
Democracy represents the freedom or liberty to choose, so while the democracy program may seem by intuition, one which gives the workers freedom to choose whether to attend it or not, it is actually coercing the members to attend instead which represents a paradox of power since the paradox in this case is coercion or power.
Answer:
Unconventional paradox of participation
Explanation:
This is a situation whereby participation activity is coerced by legal means, this might be due to a clause inserted in terms written in the job acceptance letter. This can also be called paradox of power, where the participants are not allowed to exercise their free will.
When merchandise is sold on account and sales tax is also collected:
(A) Accounts Receivable is credited for the total sale and sales tax.
(B) the Accounts Receivable balance is increased.
(C) Sales is debited for the price of the goods.
(D) the sales tax is not reported.
Answer:
B) The accounts receivable balance is increased
Explanation:
When merchandise is sold on account and sales tax is also collected so
following entry is made:
Accounts receivable Debit
Sales Credit
Sales tax payable Credit
The above entry depicts that accounts receivable is debited so Option A is wrong as it calls for credit of accounts receivable.
Option C is also wrong as it states that sales is debited as a result of mentioned transaction.
Option D is wrong as Sales tax payable is recorded with an amount of sales payable to government (federal / state), total of both sales and sales tax is debited to accounts receivable with corresponding credit to sales and sales tax.
Susan, a U.S. citizen, builds and operates a kennel in France. This action is an example of a. U.S. foreign portfolio investment and U.S. domestic investment. b. investment for Susan and U.S. foreign portfolio investment. c. U.S. foreign direct investment and U.S. domestic investment. d. investment for Susan and U.S. foreign direct investment.
Answer:
D
Explanation:
This is Susan's investment as well as US foreign direct investment
Foreign direct investment is basically an international investment in which the the individual investing which is Susan builds a lasting enterprise in another country. It normally tmeans individuals are buying or constructing a factory in a foreign country or adding improvements to such a facility, in the form of property, plants, or equipment.
b. Investment for Susan and U.S. foreign portfolio investment
Explanation:
Investment for Susan because it was built and operated by her. It is foreign portfolio investment because FPI is the entry of funds into a country where foreigners deposit money in a country's bank or make purchases in the country's stock and bond markets, sometimes for speculation
It is not Foreign Direct Investment (FDI) because is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It was not stated in the question that she based in US.
What is the ergonomically optimum body posture for performing all physical jobs?
Answer:
Mid - Range
Explanation:
Ergonomics is the study of correct posture of body. It helps employees to work with ease and comfort. It provides correct chair height, adequate spacing for the legs. Employees feel stressed out by working for hours in the same position, correct posture can help them ease their joints and stretch. It helps in increasing their productivity and also reduces the risk of musculoskeletal injuries.. An uncomfortable workplace can create health issues, like eye strain and muscle strain.
Mid-Range is the ergonomically optimum body posture for performing all physical jobs.
The study of good body posture is known as ergonomics. It enables workers to work comfortably and easily. It offers the proper chair height as well as enough room between the legs.
By spending hours in the same posture, workers become agitated; yet, good posture may help them relax and extend their joints. It increases their output while lowering their risk of musculoskeletal ailments. Workplace discomfort can lead to health problems including eye strain and muscular tension.
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(02.03 MC) Bernadette wants to set aside some money, but she wants to have easy access to it without penalty. She is not worried about earning a large amount of interest. Which of the following investments best suits her needs? Certificate of deposit Government bond Money market account Traditional savings account
Answer:
Traditional savings account
Explanation:
A Traditional savings account is a banks or other financial institution's interest-bearing deposit fund.
While these accounts usually pay a moderate rate of interest, their stability and efficiency make them a decent option for short-term saving cash that you want.
Traditional savings accounts have some constraints on how many times one can withdraw money, however they usually offer outstanding versatility that is suitable for developing an emergency savings, or merely sweeping excess cash that you don't need in your checking account so you can earn more interest somewhere else.
Harry has a new sports car that is insured with an Insurance Services Office, Inc. (ISO) Personal Auto Policy sold through his neighborhood agent. Because this is the first new car he's ever owned, Harry is interested in making sure he is fully covered and knowledgeable about his insurance policy. Which one of the following is true for Harry
Answer:
An insurance contract, like the ISO policy Harry purchased, has certain additional characteristics other than those of typical valid contracts.
Explanation:
Which one of the following is true for Harry?
Select one
A. An insurance contract, like the ISO policy Harry purchased, has certain additional characteristics other than those of typical valid contracts.
B. Harry understands his policy is modular one, combining various coverage forms and other documents especially tailored to his needs.
C. Harry can rest assured that if his new car is a total loss, he can expect to make a profit while being restored to his pre-loss financial position
D. As the policy is a contract of utmost good faith, both his insurer and his agent are the parties expected to be ethical in their dealings with one another.
What is fundamentally incorrect with the hypothesis: "Salespeople are more likely to be successful when dealing with prospects who are similar to themselves in demographic characteristics, personality traits and attitudes than when their prospects have characteristics different from their own."?
Answer:
There is no research that supports the similarity hypothesis.
Explanation:
Imagine the opposite, that this hypothesis is true, then you would only purchase goods or services from a salesperson that is extremely similar to you. Think about the things that you have purchased lately (don't include internet purchases). Did the salesperson that sold them to you was similar to you, or did you buy the goods because the salesperson was similar to you? Unless you live in a very small town with little diversity, I doubt the answer would be yes.
That doesn't mean that having a salesperson similar to you is not useful. On some occasions, for example military recruiters (they sell the idea of joining the army), the salespeople need to be similar to the potential customers, e.g. high patriotism, like weapons, etc. But it doesn't apply to all the situations, it is more an exception than a rule.
The following information has been taken from the ledger accounts of Kingbird Corporation. Total income since incorporation$326,000 Total cash dividends paid61,000 Total value of stock dividends distributed30,000 Gains on treasury stock transactions18,000 Unamortized discount on bonds payable33,000 Determine the current balance of retained earnings.
Answer:
$235,000
Explanation:
The computation of the current balance of retained earnings is shown below:
= Total income since incorporation - Total cash dividends paid - Total value of stock dividends distributed
= $326,000 - $61,000 - $30,000
= $235,000
As we know that
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
We applied the same.
A family purchased a $90,000 lot to build a custom home. At the date of closing, the lot was assessed at $84,550 and the tax rate was $1.91 / $100 assessed valuation. When they completed the home, the assessment increased by $235,000 to include the new construction. If the monthly tax escrow is based on the assessed value, what will the monthly tax escrow be?
Answer:
$508
Explanation:
The total assessed value of the house is $319,550 (= $84,550 + 235,000).
The annual tax rate is calculated in 100s, therefore we must divide $319,550 by $100 = 3,195.5 which will be rounded up to 3,196 100s.
Now we multiply 3,196 x $1.91 = $6,104.36
to calculate the monthly payment we divide $6,104 by 12 = $508
Lucky Louie just inherited $50,000 from his great aunt, has $1,500 in his checking account, owns a car with a value of $8,000, and has $20,000 in his 401(k) at work. Louie owes $6,000 on his car, $12,000 on school loans and $3,000 on his credit card. What is Louie's net worth?
Answer:
$58,500
Explanation:
Net worth is the difference between total assets and total liabilities.
I.e network = Asset - Liabilities
For Louie: Assets
Inheritance $ 50,000.00
Checking account $ 1 ,500.00
Car $ 8,000.00
403 (k) $ 20,000.00
Total $ 79,500.00
Liabilities
Car loan $ 6,000.00
School fee loan $ 12,000.00
credit card $ 3, 0000.00
Total $21, 000.00
Net worth = $ 79,500- $21,000
=$58,500
The federal government expenditures for defense are comparatively high in the U.S. compared to other nations.
A) True
B) False
Answer:
The correct answer is True.
Explanation:
Top 10 countries with their spending for defence are given below.
2019 edition of "The Military Balance" from the International Institute for Strategic Studies (IISS)
Rank Country Spending (In Billion)
(US$)
1 United States United States of America 643.3
2 China 168.2
3 Saudi Arabia 82.9
4 Russia 63.1
5 India 57.9
6 United Kingdom 56.1
7 France 53.4
8 Japan 47.3
9 Germany 45.7
10 South Korea 39.2
Why are capital appreciation bonds (CABs) a controversial way for local governments to finance projects?
Answer:
See explanation section
Explanation:
Municipal security from which an investor will receive a return on investment from an initial principal is called a capital appreciation bond. However, in this security, the return on investment will be reinvested further until the security matures at a specific rate. The primary purpose of the CABs is to permit the local authority to generate revenue. Due to the financing in the innovative project without increasing the tax is one of the controversial ways for local governments to finance projects. Another controversial way is to owe investors more than what they acquired.
Suppose that the cross price elasticity of demand between good X and good Y is minus−1.55. This indicates that the two goods are
Answer:
Complementary goods
Explanation:
Cross price elasticity of demand between two goods, X and Y
= [tex]\frac{Percentage Change in Demand of X}{Percentage Change in Price of Y}[/tex]
For the cross price elasticity to be negative at -1.55, it means
the higher the price of Y (which will naturally translate to a lower demand for Y), the less the quantity of X that is demanded, andthe lower the price of Y (translating to a higher demand for Y), the less the quantity of X that is demanded.Thus, demand for both X and Y move in the same direction meaning they are complementary goods and are used together.
Which stage of team development is marked by conflicts over the team's mission and the roles of team members?
a. norming stage
b. forming stage
c. performing stage
d. storming stage
Answer: option D
Explanation: Storming stage is really the toughest and perhaps most important phase to reach. When different personalities develop, it is a time characterized by tension and rivalry.
Throughout this point, team's performance might actually reduce as power is put in to the nonproductive operations. Representatives might well disagree with team objectives and it may form categories and subcultures all over big personalities or regions of contract.
Participants have to struggle to overcome barriers, accept differences between individuals, and work on squad functions and objectives via contradictory ideas to get over this level. At this point, teams may get embroiled. Lengthy-term issues may lead from inability to address disputes.
Answer:
C. performing stage
Explanation:
In order to vote in Texas, you must meet which of the following requirements?
A. be a resident of Texas, a U.S. citizen, and at least 18 years of age
B. be a resident of Texas, a U.S. citizen, and at least 21 years of age
C. be a resident of Texas, a legal permanent resident of the U.S, and at least 18 years of age
Answer:
I think letter A is the right answer
In order to vote in Texas, an individual must be a resident of Texas, a U.S. citizen and at least 18 years of age.
Voting is a civic responsibility and contains requirements to be meant before a person can cast their vote.A United States citizen who must vote in Texas must first have resident of the Texas county in which application for registration is made.
The individual must at least 18 years old on Election Day and must not be convicted of a felony, or if convicted, must have fully discharged the sentence amidst other criterion.
Conclusively, periodic Voting is necessary to elect new leader of a country.
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In 2008, the NBC television network used advertising, personal selling, public relations, and sales promotion to communicate with its target audience about its new show My Own Worst Enemy. The television network's _____ described its plan on how to use these tools most effectively.
a. mass communication mix
b. promotional strategy
c. selling plan
d. marketing mix
e. strategic goal
Answer: (B) Promotional strategy
Explanation:
The promotional strategy is one of the type of marketing strategy in which the various types of products and the services are get promoted by the various types of techniques such as public relation, advertising, sales promotion and the social media.
The promotional strategy provides various types of benefits as it increase the productivity of the products and the services in the market.
There are usually four types of promotional strategy that are:
AdvertisingPersonal selling Publicity Sales promotionTherefore, Option (B) is correct.
Which settlement option provides a single beneficiary with income for the rest of his/her life?A. Single lifeB. Fixed amountC. Lump sumD. Retained assets
Answer:
life income
Explanation:
The life income option allows the beneficiary to receive payments for the rest of his/her life. The insurance company generally determines the amount it will hand out every year (or other specified period of time) based on the total benefits, and the age and gender of the beneficiary. The life income option is very similar to a life annuity.
One reason there is a need for integrated marketing communications is that __________.
A. communication channels today are less fragmented than in the past.
B. messages from companies come from a single source.
C. consumers don't distinguish between content sources the way marketers do.
D. companies often integrate their various communication channels.
E. consumers today distinguish brand-related content from different sources
One reason there is a need for integrated marketing communications is that consumers don't distinguish between content sources the way marketers do.
Explanation:
Integrated messaging in marketing is a simple concept. This guarantees the diligent relation of all forms of communication and communications. Integrated marketing communications, or IMC, as we will term it, at its fundamental level, involves combining all promotional instruments in a harmonious fashion.
For example, an IMC is used to convey campaign messages through various channels. This increases the efficiency of activities used to turn foreigners into prospects and customers.
The need for integrated marketing communications arises because consumers don't distinguish between different content sources like marketers do. Therefore, companies need to ensure their communication across various channels is consistent and provides a unified message.
Explanation:One reason there is a need for integrated marketing communications is that consumers do not distinguish between content sources the way marketers do. In today's inundated marketing landscape, consumers are exposed to messages from multiple channels and often do not differentiate between them. Therefore, it is important for companies to ensure consistency and synergy in their communications across different channels. This is what integrated marketing communications aim to achieve. It allows companies to deliver a unified and seamless message that helps build a coherent brand image and thus, enhances the brand's overall credibility and value to consumers.
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Riya was a highly successful manager at Optics International. After 10 years with the company, she decided to leave and become a full-time mother and caregiver to her ailing father. This example demonstrates which of the following factors affecting women’s careers?
Answer:
The given example demonstrates the factor named 'Opt-out trend'.
Explanation:
According to the opt-out trend, working women tend to voluntarily leave their career for various reasons like maternity reasons, or to give more time to their family. This is generally because such women are either unable to maintain their work-life balance, or they prioritize their personal life over their professional and thus, opt for this option.
Moorland Industries owns 20,000 of the 50,000 outstanding shares of Paragon Resources’ common stock. Paragon had net income of $1 million and paid cash dividends of $800,000 in 2020.
If Moorland had a beginning balance of $625,000 in their investment account in 2020, their ending balance on December 31, 2020 should be ______.
Answer:
$945,000
Explanation:
20,000 of 50,000 outstanding shares in paragon means that Moorland Industries is entitled to 40% or 20/50 of the declared dividend of Paragon.
Here, 40% of $800,000 is $320,000.
If the balance in the investment account at the beginning of the period was $625,000, the ending balance shall be $625,000 + $320,000.
Final answer:
To calculate Moorland Industries' ending investment balance, we factor in their share of net income and dividends from Paragon Resources, resulting in an ending balance of $705,000.
Explanation:
To calculate the ending balance of Moorland Industries' investment in Paragon Resources, we need to consider the beginning balance, the share of Paragon’s net income attributable to Moorland, and the dividends received by Moorland from Paragon.
Moorland's share of Paragon's net income: $1,000,000 * (20,000/50,000) = $400,000
Dividends received by Moorland: $800,000 * (20,000/50,000) = $320,000
Ending balance: $625,000 (beginning balance) + $400,000 (share of net income) - $320,000 (dividends received) = $705,000
The ending balance on December 31, 2020, should be $705,000.
If the price of coffee increases by 50% and the quantity demanded falls by 10%, then what is the price elasticity of demand for coffee?
a) 5
b) 2
c) 20
d) 1/5
Answer:
1/5
Explanation:
The demand is the total quantity of goods and services that consumers are willing and ready to purchase at all possible prices.
The price of a product is one of the many factors that affect its demand. There exists an inverse relationship between the quantity demanded of a product and its price. The quantity demanded of product increases as the price falls and vice versa. So changes in the price will affect the quantity consumers will buy.
However, the extent to which a change in price of a product affects its quantity is the focus of price elasticity of demand. It measures the degree of responsiveness of quantity demand to a unit change in price.
It is calculated as % change in quantity demanded / % change in price.
So let us apply this formula to this question; the price elasticity of demand
= 10%/50%= 1/5
Final answer:
The price elasticity of demand for coffee is calculated by dividing the percentage change in quantity demanded by the percentage change in price, resulting in a price elasticity of -0.2 or 1/5, which is option d).
Explanation:
To calculate the price elasticity of demand for coffee, we use the formula percentage change in quantity demanded divided by the percentage change in price. The question states that the price of coffee increases by 50% and the quantity demanded falls by 10%. Therefore, the price elasticity of demand for coffee is -10% / 50% = -0.2. The negative sign indicates that the relationship between price and quantity demanded is inverse, as is typical for price elasticity of demand.
Given the options provided, the correct answer for the price elasticity of demand for coffee would be d) 1/5 or -0.2 when we ignore the negative sign, as absolute value is often considered in elasticity discussions.