Answer:
d. share profits and losses according to the state's Uniform Joint Venture Act.
Explanation:
Instructions: Read the Grand View Grocers Corporation case below.
Grand View Grocers Corporation, headquartered in Clewiston, Florida, is among the nation’s top grocery chain companies, with over $34 billion in revenue. It operates and owns approximately 1,500 grocery stores in 10 states and will be expanding operatons to Washington, D.C. in the near future.
Grand View Grocer’s Corporation’s operating strategy distinguishes it from other grocery chain companies. Each grocery store has a Training and Development Methods manager that allows decisions to be made locally, close to the client. This also makes Grand View Grocer Corporation’s service more responsive, reliable, and empathetic to its customers.
Recently, Grand View Grocers Corporation has identified a that there is an increase in the annual turnover rate for cashiers nationwide. The increase was found in newly hired cashiers, so it was determined that on-the-job training was ineffective.
Under the direction of the store manager, cashiers perform a variety of tasks, including:
*Receive payment by cash, check, credit cards, vouchers, or automatic debits.
*Issue receipts, refunds, credits, or change due to customers.
*Count money in cash drawers at the beginning of shifts to ensure that amounts are correct and that there is adequate change.
*Greet customers entering establishments.
*Maintain clean and orderly checkout areas.
*Establish or identify prices of goods, services or admission, and tabulate bills using calculators, cash registers, or optical price scanners.
*Issue cashier’s checks, money orders, mailing stamps, and redeem food stamps and coupons.
*Resolve customer complaints.
*Answer customers' questions, and provide information on procedures or policies.
*Cash checks for customers.
*Weigh items sold by weight in order to determine prices.
*Calculate total payments received during a time period, and reconcile this with total sales.
*Compute and record totals of transactions.
*Sell lotto tickets and other items to customers.
*Keep periodic balance sheets of amounts and numbers of transactions.
*Bag, box, wrap, or gift-wrap merchandise, when needed.
*Sort, count, and wrap currency and coins.
*Process returns and exchanges.
*Request information or assistance using paging systems.
*Stock shelves, and mark prices on shelves and items, when needed.
*Compile and maintain non-monetary reports and records.
Essential cashier functions include the following:
Perform for or Working Directly with the Public -- Performing for people or dealing directly with the public. This includes serving customers in restaurants and stores, and receiving clients or guests.
Establish and Maintain Interpersonal Relationships -- Developing constructive and cooperative working relationships with others, and maintaining them over time.
Get Information -- Observing, receiving, and otherwise obtaining information from all relevant sources.
Identify Objects, Actions, and Events -- Identifying information by categorizing, estimating, recognizing differences or similarities, and detecting changes in circumstances or events.
Process Information -- Compiling, coding, categorizing, calculating, tabulating, auditing, or verifying information or data.
Describe in 350- to 525- words the training method or combination of training methods that you would recommend for training.
Justify in 350- to 525- words your choice of method(s).
Solution and Explanation:
The following would be the specifications of the training module for the cashiers:
1. There would be multiple modules consisting of the job responsibilities as refresher courses and at the same time, the new market conditions and additional job related things that they must be doing in the near future would be the other modules.
2. The key areas that the multi module training program would be focussing on would be, customer relationship training, system and data maintenance training, documentation and accounting module
3. The training intervention would be preferably on job and alongside there would be a mentor/coach allotted to the cashiers who are experts in the field preferably store managers and functional experts. For the system related modules, they would be having simulation based modules. Only during the non rush-hours there would be offline training and update sessions with respect to the progress made on their training and the productivity improvement they have achieved over the past week.
The incentives associated with the productivity improvement would be translated into incentivising the cashiers to take up the training modules. The weekly update on the productivity improvement and the progress in their training would inturn make them competitive in nature. While coming to why such distribution has been done with respect to the modules, essentially if we look at the job of the cashiers, it’s a round the clock job and they would lose out on precious working hours if the training is done on an offline basis.
The simulations would definitely help understand the process but the on job training would be the one that is standing out, as they would be continuing their task and at the same time, the result is right in front on them to experience and therefore the distribution of the modules to not stress them out and at the same time not losing out on their time as well.
For direct price discrimination to work a. The firm need not be able to identify the members of the low-value group b. The firm be able to charge the low-value customers a lower price than the higher-value customers c. The firm need not worry about any arbitrage since all its customers are charged the same price d. It needs to be too complicated for the customers to understand
Answer:
The correct answer is letter "B": The firm be able to charge the low-value customers a lower price than the higher-value customers.
Explanation:
Price discrimination is the practice by which producers charge different prices to different consumers based on factors such as age, income or location to mention a few. This differentiation in prices is always justified by producers with one of those factors otherwise the approach would be considered illegal.
Direct price discrimination is carried out when the firm charges lower prices to an unfavored sector of the market keeping the regular price in sectors where income is higher.
Etcetera Clothing sold merchandise inventory on account at a price of $15,000 with payment terms of 2/10, n/30. The merchandise cost Etcetera Clothing $10,000. If the customer paid for the merchandise 5 days after receiving the invoice, how much cash was collected by Etcetera Clothing?
Answer:
$14,700
Explanation:
We know,
2/10, n/30 means if a customer pays within 10 days, he/she will get a discount of 2% of his original purchase. However, the customer has to pay the full amount within 30 days.
As Etcetera Clothing received the payment within 5 days, the company gave a discount of 2% according to the terms. Therefore, Etcetera Clothing would receive =
$15,000 - ($15,000 × 2%)
= $15,000 - 300
= $14,700
A company had calculated net income to be $77,850 based on the unadjusted trial balance. The following adjusting entries were then made for: Salaries and wages owed but not yet paid of $820 Interest earned but not received from investments of $780 Prepaid insurance premiums amounting to $580 have expired Unearned revenue in the amount of $780 has now been earned.
Answer:
Adjusted net income will be $78,010
Explanation:
According to the Accrual concept all the accrued expenses should be recognized and deducted from the unadjusted net income and all the earned revenues should be recognized and added to unadjusted net Income.
Salaries and wages owed but not yet paid of $820 is an expense which is accrued but not been paid it should be recorded and deducted from the unadjusted net income as earlier expenses were understated.
Interest earned but not received from investments of $780 is the revenue recognized but not been received until now. Accrual Concept requires that when revenue is realized it should be recognized into the accounting records. So it should be added to the net income.
Prepaid insurance premiums amounting to $580 have expired is actually an accrued expense which previously recorded as prepaid expense. It should be deducted from the net income as it is a expense which need to be recognized.
Unearned revenue in the amount of $780 has now been earned. Now it should be added to the net income because it is a revenue item that should be recognized as it is recorded as unearned revenue earlier.
Net income to be $77,850 based on the unadjusted trial balance.
Adjusted Net Income = $77,850 - $820 + $780 - 580 + 780 = $78,010
Final answer:
Adjusted net income is calculated by considering the effects of adjusting entries for unpaid salaries and wages, interest earned, expired insurance premiums, and now-earned unearned revenue on the net income previously based on the unadjusted trial balance. The adjusted net income is $78,010 after accounting for these changes.
Explanation:
The question involves making adjusting entries to a company's financial records to reflect events that have occurred but are not yet recorded in the accounts. This process is a key part of the accounting cycle, ensuring that the financial statements reflect the true financial position of the company at the end of the accounting period. Adjusting entries for salaries and wages, interest, prepaid insurance, and unearned revenue will affect both the company's balance sheet and income statement.
To calculate the adjusted net income, we need to consider the effect of these adjustments on the originally calculated net income:
Interest earned (revenue increases, increasing net income): $780
Expired insurance premiums (expense increases, reducing net income): $580
$77,030 + $780 (increase in accounts receivable - interest)
$77,230 + $780 (decrease in deferred revenue)
Adjusted net income: $78,010
In the year, 2005 Janice Quinn sells a five-year-old car to Used Car, Inc. for $3,000. In the same year, Used Car, Inc. resells the car to Ima Goner for $3,500. What is the contribution of this transaction to GDP in the year 2005
Answer:
$500
Explanation:
The computation is shown below:
Data provided in the question
Sale value of five year old car to used car = $3,000
Now in the same year, the resales value to Ima Goner = $3,500
So, the contribution made in the GDP for the year 2005 is
= Resales value to Ima Goner - Sale value of five year old car to used car
= $3,500 - $3,000
= $500
Historically, common crimes (such as robbing a bank) were punished more severely than white collar crimes (like embezzlement). Why do you think that is? Since 2003, there has been a steady push to punish white collar crimes at least as severely as common crimes are punished. Do you feel that this is in the best interest of society? Should white collar crimes be punished more severely, less severely, or the same as comparable common crimes?
Answer:
They must be severely punished.
Explanation:
Common crimes earlier were more threat full to the society than any other act and that is the reason they were mentioned more.
Since, the new era has new crimes, and one of the kind is white collar crimes which happens when companies’ heads try to misguide people with false financial reports, adding more losses to avoid taxes and sometimes showing more profit to attract potential investors, now it has become even severe.
Whichever the case, both crimes ultimately effect society and its stakeholders, however, common crimes are more frequent than white collar crimes.
Hence, they must be severely punished because they are committing crimes under the disguise of an innocent professionals.
C. Reither Co. reports the following information for 2014: sales revenue $700,000; cost of goods sold $500,000; operating expenses $80,000; and an unrealized holding loss on available-for-sale securities for 2014 of $60,000. It declared and paid a cash dividend of $10,000 in 2014. C. Reither Co. has January 1, 2014, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2014. Prepare a statement of stockholders' equity.
Answer:
Explanation:
Statement of Share holder equity is given below
Balance on January 01, 2014
Equity / Common stock 350000
Retained Earning 90000
Accumulated other comprehensive 80000
income
unrealized holding loss on 60000
available-for-sale securities for 2014
Sales Revenue 700000
Cost of goods sold 500000
Operating Expense 80000
Net income = Sales Revenue - Cost of goods sold - Operating Expense
Net income = 700000 - 500000 - 80000 = 120,000
Comprehensive income = Net income - unrealized holding loss on available-for-sale securities for 2014
Comprehensive income = 120000 - 60000 = 60000
Shareholder equity
Equity / Common stock 350000
Retained Earning 90000
Comprehensive income 60000
Accumulated other comprehensive income 80000
Total Shareholders equity 580,000
On July 1, an investor holds 50,000 shares of a certain stock. The market price is $30 per share. The investor is interested in hedging against movements in the market over the next month and decides to use the September Mini S&P 500 futures contract. The index is currently 1,500 and one contract is for delivery of $50 times the index. The beta of the stock is 1.3.
What strategy should the investor follow?
Answer:
The strategy the investor should follow is to short the September Mini S&P 500 futures contract by 26
Explanation:
Parameters:
Portfolio value= P = 50,000 * 30 = $1,500,000
Beta of stock β = 1.3
Index price = 1,500
Multiplier = $50
Futures Value A = 1,500*50 = $75,000
The formula to calculate number of contract N;
N= β ∗ P/A
N= 1.3*1,500,000/75,000
N= 26
The strategy the investor should follow is to short the September Mini S&P 500 futures contract by 26
To hedge their portfolio, the investor should enter into a short position of approximately 26 September Mini S&P 500 futures contracts. This allows the investor to mitigate risk associated with market movements.
Explanation:In this scenario, the investor is looking to hedge their portfolio using the September Mini S&P 500 futures contract. Given that their portfolio has a beta of 1.3, it suggests that the portfolio is more volatile than the market. The use of futures can help to reduce this risk.
The investor needs to calculate the number of futures contracts to enter into, which can be calculated using the formula:Hedging Ratio = Beta x (Value of the Portfolio / Future Price). In this case, the Value of the Portfolio is $1,500,000 (50,000 shares x $30/share). While, the Future Price is $75,000 (1,500 index value x $50). Plugging these into the formula, the investor would need approximately 26 futures contracts to hedge their portfolio.
So, the investor should short 26, September Mini S&P 500 futures contracts.
Learn more about Financial Hedging here:https://brainly.com/question/32064230
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On September 30, Silver Corporation, a calendar year taxpayer, sold a parcel of land (basis of $400,000) for a $1 million note. The note is payable in five installments, with the first payment due next year. Because Silver did not elect out of the installment method, none of the $600,000 gain is taxed this year. Silver Corporation had a $300,000 deficit in accumulated E&P at the beginning of the year. Before considering the effect of the land sale, Silver had a deficit in current E&P of $50,000. Sam, the sole shareholder of Silver, has a basis of $200,000 in his stock. If silver distributes $900,000 to Sam on December 31,
how much income must he report for tax purposes?
Answer: Sam must report $700,000($900,000 - $200,000) for tax purposes.
Explanation:
Because Sam is the sole shareholder of Silver, and has a basis of $200,000 in his stock. Once Silber distributes $900,00to Sam on December 31
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 14 percent, and the company just paid a dividend of $3.40, what is the current share price?
Answer;
$ 70.07
Explanation:
The price of the stock when the dividends level off at a constant growth rate, we then find the PV of the future stock price, including the PV of all dividends during the super normal growth period. The stock start it constant growth in Year 4, so that we can be able to find the price of the stock in Year 3, which is the year before the constant dividend growth begins as:
P3= D3(1 + g) / (R− g) = D0(1 + g1)3(1 + g2) / (R− g)
P3= $3.40(1.24)3(1.06) / (.14 − .06)
P3= $85.89
Therefore the price of the stock today is the PV of the first three dividends, we then add it with the PV of the Year 3 stock price.
Hence the price of the stock today will be:
P0= $3.40(1.24) / 1.14 + $3.40(1.24)2/ 1.142+ $3.40(1.24)3/ 1.143+ $85.89 / 1.143
P0= $70.07
The current shape price is $70.07
Match the way each of the items listed below with how it should be reported in a balance sheet at December 31, 2018. Customer advances. Noncommitted line of credit. Commercial paper. Note due June 9, 2019. Accounts payable. Long-term bonds that will be callable by the creditor in the upcoming year unless an existing violation is not corrected (there is a reasonable possibility the violation will be corrected within the grace period). Long-term bonds callable by the creditor in the upcoming year that are not expected to be called. Estimated cost of quality-assurance warranty. Interest accrued on note, Dec. 31, 2018. Short-term bank loan to be paid with proceeds of sale of common stock. A material gain contingent on a future event that appears extremely likely to occur in three months. A. Disclosure note only B. Long-term liability C. Current liability
Answer:
1. Customer Advances (will be matched to Current Liabilities).
2.Non-committed line of Credit (will be matched to disclosure note only).
3.Commercial Paper (will be matched to Current Liabilities).
4.Note due June 9 2019 (will be matched to Current Liabilities).
5.Accounts Payable (will be matched to Current Liabilities).
6.Long-term bonds callable in 2019 (will be matched to Current liabilities)
7.Estimated cost of Quality Assurance Warranty (will be matched to Current liabilities for expected claims within one year and long term liabilities for expected claims falling due after 1 year)
8.Interest accrued on note, Dec. 31, 2018. (will be matched to Current Liabilities)
9.Short-term bank loan to be paid with proceeds of sale of common stock (will be matched to Current Liability)
10.A material gain contingent on a future event that appears extremely likely to occur in three months (will be matched to disclosure note only)
Explanation:
Customer Advances (will be matched to Current Liabilities).
These are advance payment of Cash made by our Customers for the Purchase of our goods also called Prepayments. Usually such purchases occur within a financial year of Trading and therefore qualifies as a current liability.
Non-committed line of Credit (will be matched to disclosure note only).
This is a bank facility that hasn't been utilized. Hence it is only reasonable to show as a disclosure note only for information purposes
Commercial Paper (will be matched to Current Liabilities).
Commercial Papers are usually short term in nature. They are unsecured debts issued by companies to cover for its working capital requirements. as such we will classify these as Current Liabilities
Note due June 9 2019 (will be matched to Current Liabilities).
Although not falling due within the current financial year 2018, it falls due within 1 year from the Balance Sheet date. Thus it qualifies to be regarded as a Current Liability
Accounts Payable (will be matched to Current Liabilities).
These are payments due Vendors for transactions occurring in the outgoing financial year. The Payment terms for such services or supplies vary by company, it ranges between 30 days to 120 days in most instances however.
Long-term bonds callable in 2019 (will be matched to Current liabilities)
Even though the Bond has been classified as Long term, it falls callable within 2019, meaning it has a not more than 1 year life span to expire. it will be classified under Current liabilities as long-term debt falling due within 1 year.
Long-term bonds callable in 2019, but not expected to be called (will be matched to Current liabilities)
Falling due within one year gives us an indication it is a current liability. However going by the information it will very likely not be called, we may indicate this extra information in the notes disclosure but retain the liability under Current Liability.
Estimated cost of Quality Assurance Warranty (will be matched to Current liabilities for expected claims within one year and long term liabilities for expected claims falling due after 1 year)
Where it can be reasonably estimated what the warranty expense would be, the Business should accrue in 2018 the likely warranty liability due with respect to 2018.
Where Warranty granted exceeds current year, a warranty provision will have to be made covering the duration of Warranty. If extending beyond 1 year, we should then classify these as Long term liability
Interest accrued on note, Dec. 31, 2018. (will be matched to Current Liabilities)
These relate to interest due up to Dec 31 2018 on note issued.
Short-term bank loan to be paid with proceeds of sale of common stock (will be matched to Current Liability)
It is a short term loan, meaning it will be due for payment within a short period of less than 1 year.
The way it will be paid (through sales of Common Stocks) is an information the Shareholders need have as a disclosure note since the sales hasn't occurred.
A material gain contingent on a future event that appears extremely likely to occur in three months (will be matched to disclosure note only)
The prudence concepts precludes a business from recognizing a gain before it is realized, hence the Business can only note this in its disclosure note giving details to shareholders of pending gains.
Answer: (a) current liability (b ) Disclosure note only (c) current liability (d) current liability (e) current liability (f) current liability (g) current liability (h) current liability (i) current liability (j) Long term Liability (k) Disclosure note only
Explanation:
Balance sheet is a statement prepared at the end of each trading period of a business which consist of the summary of debit and credit balance of assets and liabilities in the ledger accounts. It is prepared in order to know the financial position or the strength of the business. The important terms in the balance sheet includes Long term Liabilities which are the debts that are payable in the near future that is not within a year such as mortgage, other terms are the current liabilities which are the debts which must be paid quickly and certainly within or about a year examples of such are outstanding expenses, loans, bill payable and sundry creditors. We also have fixed asset which are the properties of a durable nature in an organization likely to be retained for a considerable number of period. Also we have current asset which are the resources used in the trading activities of the business. However, a disclosure note is not in the balance sheet .it is simply a note which shows certain information pertaining to the business which cannot be shown in the balance sheet such as the business accounting policies such as method of deprecation, investment, the values of their fixed asset and so on. I will therefore match the items in the balance sheet as follows
(a) customer Advances is a current liability
(b) Non committed line of credit is a Disclosure note only
(c) Commercial paper is a current liability
(d) Note due June 9, 2019 is a current liability
(e) Account payable is a current liability
(f) Long term bonds that will be callable by the creditor in the upcoming year unless an existing violation is not corrected ( there is a reasonable possibility the violation will be corrected within the Grace period ) is a current liability
(g) Long term bond callable by the creditor in the upcoming year that are not expected to be called is a current liability
(h) Estimate cost of quality assurance is a current liability
(i) Interest accrued on note is a current liability
(j) December 31,2018 short term bank loan to be paid with proceed of sale of common stock is a Long term Liability
(k) A material gain contingent on a future event that appears extremely likely to occur in 3 months is a Disclosure note only
The president of a company gave two talks, one on Monday and one on Tuesday. A total of 405 employees attended the Monday talk, 275 attended the Tuesday talk and 55 went to both. How many employees attended at least one of the talks
Answer:
625 employees
Explanation:
Given that,
Let the Monday talk be A and the Tuesday talk be B,
Employees attend Monday talk: I A I = 405
Employees attend Tuesday talk: I B I = 275
Employees attend both talks: I A ∩ B I = 55
Employees attended at least one of the talks: I A ∪ B I
= I A I + I B I - I A ∩ B I
= 405 + 275 - 55
= 625
Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumulated savings and inheritance). In the late 1990's many were concerned with very large increase in stock value (a form of wealth) and it's possible effect on saving and investment.
The following consumption function incorporate wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (I):
C=45+0.60Y+0.05W
I=100
W=800
We are ignoring the fact that saving adds to the stock of wealth.
Calculate the value of equilibrium Y,C, and savings (S). (Enter you responses as Integers. )
Answer:
Equilibrium Y = 462.5 , Equilibrium C = 362.5 , Equilibrium S = 100
Explanation:
At equilibrium : Aggregate Demand = Aggregate Supply[ AD = C + I ] = [ AS = C + S = Y ]
45 + 0.6Y + 0.05 W + 100 = Y → 45 + 0.6Y + 0.05 (800) + 100 = Y
45 + 40 + 100 + 0.6Y = Y → Y ; 185 + 0.6Y = Y
Y - 0.6Y = 185
0.4Y = 185
Y = 185 / 0.4 = 462.5
Consumption C = 45 + 0.6Y + 0.05WPutting Y value : C = 45 + 0.6 (462.5) + 0.05 (800) → C = 45 + 277.5 + 40
C = 362.5
Income Y is either consumed (C) or saved (S). So, Y = C + SHence , S = Y - C → 462.5 - 362.5 = 100
Alternatively : As C + I = C + S
Hence, I = S
Equilibrium Savings = Given Investment = 100
Final answer:
Given the consumption function C=45+0.60Y+0.05W with W=800 and I=100, the equilibrium values for this simple economy are found to be income (Y)=463, consumption (C)=364, and savings (S)=99 when rounded to integers.
Explanation:
Considering a simple economy where the consumption function incorporates wealth as a determinant of consumption, we are given a consumption function C=45+0.60Y+0.05W, with I=100 and W=800. To find the equilibrium values for income (Y), consumption (C), and savings (S), we follow these steps:
First, substitute the given wealth (W) into the consumption equation: C=45+0.60Y+0.05(800).
Since W=800, substituting this gives us C=45+0.60Y+40, simplifying to C=85+0.60Y.
For equilibrium in a simple economy without government or foreign trade, investment (I) equals savings (S), and Y=C+I. Hence, total output (Y) also equals consumption (C) plus investment (I).
Using the equilibrium condition Y=C+I, we substitute the values to get Y=85+0.60Y+100.
This simplifies to 0.40Y=185, solving for Y yields Y=462.5.
By substituting Y back into our consumption equation, C=85+0.60(462.5) = 363.5.
Finally, savings (S) is the difference between output (Y) and consumption (C): S=Y-C=462.5-363.5=99.
Therefore, the equilibrium values are Y=463, C=364, and S=99 when rounded to integers.
According to the dynamic AD-AS model, what is the most common cause of inflation? A. AD increases by more than LRAS. B. Total spending increases faster than total production. C. The U.S. Mint prints too much currency. D. All of the above. E. A and B only.
Answer: Option E
Explanation:
Inflation is an economic term that refers to a situation of continuous increase in the price level of goods and services. Inflation can either be as a result of a rise in demand or due to a rise in the production cost.
When the available resources in the economy are used in the production process, such economy will have little supply of products in the long run.
When there is an increase in aggregate demand as a result of other factors apart from the price of the product, there will be a rightward shift of the aggregate demand curve on the LRAS.
The rightward shift in aggregate demand curve will result into an increase in price but the quantity supplied does not increase which leads to inflation.
Answer:
A and B only.
That is
A. AD increases by more than LRAS.
B. Total spending increases faster than total production.
Explanation:
Inflation can be defined as loss of value of goods and services. The price of a basket of goods and services increases over time, meaning the purchasing power of money reduces.
In the AD-AS model inflation occurs of total spending occurs faster than total production. Goods and services become scarce, there is too much money chasing scare product, prices will go up resulting in reduction of purchasing power of money (inflation).
When AD increases more than the LRAS (long run aggregate supply) it results in shortage of goods and increase in price of goods.
In the economy of Cycladia, the total unemployment rate is equal to 11.0 percent, the structural unemployment rate is 2.42.4 percent, and the frictional unemployment rate is 4.4 percent. The cyclical unemployment rate equals ____ percent. (Enter your response rounded to one decimal place.)
The cyclical unemployment rate in the economy of Cycladia is 4.2%.
Explanation:The cyclical unemployment rate in the economy of Cycladia can be calculated by subtracting the sum of structural and frictional unemployment rates from the total unemployment rate.
In this case, the total unemployment rate is 11.0%, the structural rate is 2.4%, and the frictional rate is 4.4%.
So, to find the cyclical unemployment rate, we subtract 2.4% and 4.4% from 11.0%, resulting in a cyclical unemployment rate of 4.2%.
Final answer:
The cyclical unemployment rate in Cycladia is 4.2 percent, calculated by subtracting the sum of the frictional (4.4%) and structural (2.4%) unemployment rates from the total unemployment rate (11.0%).
Explanation:
To calculate the cyclical unemployment rate in Cycladia, we start by understanding that the total unemployment is the sum of frictional, structural, and cyclical unemployment. The total unemployment rate in Cycladia is 11.0 percent, the frictional unemployment rate is 4.4 percent, and the structural unemployment rate is 2.4 percent. To find the cyclical unemployment rate, we subtract the sum of frictional and structural unemployment rates from the total unemployment rate:
Total Unemployment = Frictional Unemployment + Structural Unemployment + Cyclical Unemployment11.0% = 4.4% + 2.4% + Cyclical UnemploymentCyclical Unemployment = 11.0% - (4.4% + 2.4%)Cyclical Unemployment = 11.0% - 6.8%Cyclical Unemployment = 4.2%The cyclical unemployment rate in Cycladia equals 4.2 percent.
Suppose that a demand curve exhibits two points. Initially, at price P 0 P0 , the quantity demanded is Q 0 Q0 . When price changes to P 1 P1 , quantity demanded is Q 1 Q1 . Move the components of the midpoint formula for elasticity of demand to their correct positions. price elasticity of demand = ∣ ∣ ∣ ∣ ∣ ( − ( + 2 ) ) ( − ( + 2 ) ) ∣ ∣ ∣ ∣ ∣ price elasticity of demand=|( − ( + 2))( − ( + 2))|
Answer:
Price Elasticity of Demand 1
Explanation:
We are given the following data:
[tex]\left[\begin{array}{ccc}Price&Quantity\\0&0\\1&1\end{array}\right][/tex]
We solve for price elasticity which is the reaction to demand based on the price:
[tex]\frac{q_1-q_2}{\frac{q_1+q_2}{2}} \div\frac{p_1-p_2}{\frac{p_1+p_2}{2}}[/tex]
We post our values into the formula:
[tex]\frac{0-1}{\frac{0+1}{2}} \div \frac{0-1}{\frac{0+1}{2}}[/tex]
And solve for the price elasticity of demand
[tex]\frac{-1}{\frac{+1}{2}} \div \frac{-1}{\frac{+1}{2}}[/tex]
[tex]-0.5 \div -0.5[/tex]
Price Elasticity of Demand 1
The price elasticity of demand measures the responsiveness of the quantity demanded to a change in price, calculated using the midpoint formula. This is the percentage change in quantity demanded per percentage change in price, taken as an absolute value for practical purposes.
Explanation:The price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. It is calculated using the midpoint formula for elasticity, which states:
Price Elasticity of Demand = ∣ ∣ ∣ (Q1 - Q0) / ((Q1 + Q0) / 2) ) / (P1 - P0) / ((P1 + P0) / 2) ∣ ∣ ∣
In your case, Q1 and Q0 are the final and initial quantities demanded respectively, and P1 and P0 are the final and initial prices respectively. The absolute value | | ensures that the result is a positive number, as elasticity is usually taken as an absolute value. The formula effectively calculates the percentage change in quantity demanded for each percentage change in price.
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While living in her home country of Tanzania, Sophia Kiwanuka signed an employment contract with Anne Margareth Bakilana, a Tanzanian living in Washington, D.C. Kiwanuka traveled to the United States to work as a babysitter and maid in Bakilana’s house. When Kiwanuka arrived, Bakilana confiscated her passport, held her in isolation, and forced her to work long hours under threat of having her deported. Kiwanuka worked seven days a week without breaks and was subjected to regular verbal and psychological abuse by Bakilana. Kiwanuka filed a complaint against Bakilana for intentional infliction of emotional distress, among other claims. Bakilana argued that Kiwanuka’s complaint should be dismissed because the allegations were insufficient to show outrageous intentional conduct that resulted in severe emotional distress. If you were the judge, in whose favor would you rule? Why? [Kiwanuka v. Bakilana, 844 F.Supp.2d 107 Miller, Roger LeRoy. Business Law: Text & Cases - The First Course - Summarized Case Edition (p. 123). Cengage Learning. Kindle Edition.
In this example, Kiwanuka is suing for intentional infliction of emotional distress. This can be defined as extreme and outrageous conduct which results in severe emotional distress to another person. This act must be severely extreme, to an extent that is not normally tolerated by society. In such cases, threatening conduct coupled with repeated annoyances can be enough to offer support to a claim of intentional infliction of emotional distress.
If I were the judge, I would rule in favor of Kiwanuka, as I the fact that Bakilana held Kiwanuka in isolation and confiscated her passport is evidence of extreme emotional distress.
Arundel Company uses percentage of sales to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance of $78,000 and had a total of $805,000 in credit sales. Arundel assumes that 2.0% of sales will eventually be uncollectible. before adjustment, the Allowance for Uncollectible Accounts had a credit balance of 4,000. What dollar amount should be credited to Allowance for Uncollectible Accounts at year end?
Answer: The dollar amount that should be credited to Allowance for Uncollectible Accounts at year end is $12,100.
Explanation: As provided in the question, Arundel Company already had a credit balance of $4,000 in allowance for uncollectible accounts, before adjustment. Remember, the allowance account is usually in credit balance and mapped to the accounts receivable account to show the net balance of the receivables that is recoverable, and to show the true and fair position of that amount.
The 2% of credit sales (2% of $805,000) is $16,100 - this should serve as additional provision for bad debts expense at year end and the following journals should have been recorded: Debit Bad debt expense $16,100; Credit Allowance for uncollectible accounts $16,100. But there is $4,000 balance in the allowance account, which serves as the opening balance. The amount deemed irrecoverable during the year is $16,1000, which should represent the additional provision but since there is an exisiting balance in the allowance account, the differential would be recorded as additional provision ($16,100 - $4,000).
A random sample of 40 students were asked how much money they spent on entertainment in the last week. They spent an average of $28, with a standard deviation of $18. What is the 90% confidence interval for mean amount spent on entertainment?
Answer:
In between $23.3 and $32.7
Explanation:
standard deviation = $18
sample mean = $28
sample size = 40 students
Significance level = 1 - confidence interval = 1 - 0.9 = 0.1
Using the confidence interval calculator
90% Confidence Interval: $28 ± $4.68
($23.3 to $32.7)
With 90% confidence the population mean is between 23.3 and 32.7 based on 40 samples."
In a net lease, the tenant is responsible for paying a clearly defined portion of the property's operating expenses. Based on your understanding of the standard definitions of "netness" in commercial leases, the tenant is responsible for which of the following in a net-net lease?
A) both property taxes and insurance
B) no operating expenses
C) all operating expenses
D) only property taxes
Answer:
A
Explanation:
net-net refers to 2 of the operating expenses in Commerical property. Triple Net refers to all of the taxes, maintenance and insurance or TMI
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding.
The present value of the lease payments for the delivery truck is closest to $____.
Answer:
The present value of the lease payments for the delivery truck is closest to $207,050.
Explanation:
First we need to calculate the monthly discount rate for the lease arrangement.
EAR = (1 + APR / k) [tex]^{k}[/tex]- 1
= (1 + 0.06 / 4)[tex]^{4}[/tex] - 1 = 0.06136 or 6.14%
Monthly rate = (1 + EAR)([tex]\frac{1}{12}[/tex]) - 1
= (1.06136)[tex]^{\frac{1}{12}}[/tex] - 1 = 0.004975 = 0.4975%
Now we can apply the PVA formula in excel or calculate the PV of the lease or by a calculator:
I = 0.4975
N = 60 (5 years × 12 months/yr)
FV = 0
PMT = $4000
PV = 207,051.61.
What makes buying a foreclosed property risky? Select two. The title fee is set later and can’t be negotiated They’re usually sold "as is" Usually, you can’t inspect the home in advance You must use an adjustable-rate loan for purchase
They’re usually sold "as is" and Usually, you can’t inspect the home in advance makes buying a foreclosed property risky.
Purchasing a foreclosed property is dangerous for the following two reasons:
They're usually sold "as is"
Frequently, foreclosed homes are offered for sale as-is, with no alterations done by the bank or the prior owner.
This implies that you may be buying a house with hidden problems or damage that would cost a lot of money to rectify. You can incur unforeseen fees after buying the home if you are unable to negotiate repairs or renovations before the purchase.
Usually, you can't inspect the home in advance:
Many often, prospective purchasers of foreclosed homes are not given the chance to perform a comprehensive examination before finalizing the purchase.
Due to the lack of an assessment, there may be repulsive after-purchase shocks, such as finding basic troubles, plumbing or electrical issues, or other covered-up imperfections that were not seen amid the initial seeing. You'll not have comprehensive information on the genuine state of the property you're buying without an intensive examination.
Hence, buying a foreclosed property risky cause Usually, you can't inspect the home in advance and They're usually sold "as is".
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The correct options are B and C. Buying a foreclosed property is risky because they are usually sold 'as is' and prospective buyers often cannot inspect them in advance.
The correct answers are:
They’re usually sold “as is”Usually, you can’t inspect the home in advanceForeclosed properties are often sold “as is”, meaning the buyer takes responsibility for any existing issues without expecting repairs or improvements from the seller. Furthermore, prospective buyers often cannot inspect the home in advance, which increases the risk of unforeseen problems that may require costly repairs after the purchase.
Complete question
What makes buying a foreclosed property risky? Select two.
A. The title fee is set later and can’t be negotiated
B. They’re usually sold “as is”
C. Usually, you can’t inspect the home in advance
D. You must use an adjustable-rate loan for purchase
A piece of equipment is purchased for $110,000 and has an estimated salvage value of $10,000 at the end of the recovery period. (a) Prepare a depreciation schedule for the piece of equipment using the straight-line method with a recovery period of seven years. (b) Prepare a depreciation schedule for the piece of equipment using the sum-of the-years method. (c) Prepare a depreciation schedule using the 200% declining balance method. (d) Prepare a depreciation schedule using the 150% declining balance method.
Answer:
Year //dep expense //ac dep //book value
- $110,000.00
1 $14,285.71 $14,285.71 $95,714.29
2 $14,285.71 $28,571.43 $81,428.57
3 $14,285.71 $42,857.14 $67,142.86
4 $14,285.71 $57,142.86 $52,857.14
5 $14,285.71 $71,428.57 $38,571.43
6 $14,285.71 $85,714.29 $24,285.71
7 $14,285.71 $100,000.00 $10,000.00
SUM OF YEARS
Year //factor// dep expense //ac dep //book value
- $110,000.00
1 0.25 $25,000.00 $25,000.00 $85,000.00
2 0.21 $21,428.57 $46,428.57 $63,571.43
3 0.18 $17,857.14 $64,285.71 $45,714.29
4 0.14 $14,285.71 $78,571.43 $31,428.57
5 0.11 $10,714.29 $89,285.71 $20,714.29
6 0.07 $7,142.86 $96,428.57 $13,571.43
7 0.04 $3,571.43 $100,000.00 $10,000.00
200% double declining:
[tex]\left[\begin{array}{ccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&110000\\1&110000&31428.57&31428.57&78571.43\\2&78571.43&22448.98&53877.55&56122.45\\3&56122.45&16034.99&69912.54&40087.46\\4&40087.46&11453.56&81366.1&28633.9\\5&28633.9&8181.11&89547.21&20452.79\\6&20452.79&5843.65&95390.86&14609.14\\7&14609.14&4609.14&100000&10000\\\end{array}\right][/tex]
150% accelerated depreaciation:
[tex]\left[\begin{array}{cccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&110000\\1&110000&23571.43&23571.43&86428.57\\2&86428.57&18520.41&42091.84&67908.16\\3&67908.16&14551.75&56643.59&53356.41\\4&53356.41&11433.52&68077.11&41922.89\\5&41922.89&8983.48&77060.59&32939.41\\6&32939.41&7058.45&84119.04&25880.96\\7&25880.96&15880.96&100000&10000\\\end{array}\right][/tex]
Explanation:
Straight Line:
Acquisition Value 110,000
Salvage Value 10,000
ammount subject to depreciation 100000
Useful Life 7
depreciation per year:
depreciable amount divided by useful life 14285.71
This amount is repeatead throughout the life of the equipment.
SUM OF YEARS FACTORS:
sum of year: 7*8/2 = 28
remaining years over sum of year
1st 7/28
2nd 6/28
3rd 5/28
4th 4/28
5th 3/28
6th 2/28
7th 1/28
Double declining 200%
we have to multiply 1/useful life by the double declining facot
in this case as it is 200% it will be 2.
threfore the carrying vlue is multiplied by 2/7 each year to determinatethe depreciation expense
declining 150%
here we multiply by 1.5 resulting in a factor of 3/14 to obtain the depreciation expense
Answer:
Depreciation schedule using Straight Line Method
Straight Sum of 200 % declining 150 % declining
Line the years balance balance
Method Method Method Method
Year 1 $ 14,285 $ 25,000 $ 31,427 $ 23,570
Year 2 $ 14,285 $ 21,429 $ 22,448 $ 18,520
Year 3 $ 14,285 $ 17,857 $ 16,035 $ 14,551
Year 4 $ 14,285 $ 14,286 $ 11,454 $ 11,433
Year 5 $ 14,285 $ 10,714 $ 8,181 $ 8,984
Year 6 $ 14,285 $ 7,143 $ 5,844 $ 7,059
Year 7 $ 14,285 $ 3,571` $ 4,174 $ 5,546
Explanation:
Computation of Depreciation under the straight Line Method
Cost of equipment $ 110,000
Salvage Value $( 10,000)
Depreciable Basis $ 100,000
Estimated Useful Life 7 years
Depreciation % per year 14.285%
Depreciation per year for each year $ 14,285
Computation of Depreciation under the Sum of the years method
In a sum of the years balance method the no of years recovery life is added together as a denominator and the first year the highest depreciation is charged. The salvage value is considered and the depreciable basis is the same as the Straight Line Method
Sum of the years ( 7 + 6 + 5 + 4 + 3 + 2 + 1) = 28
Depreciable basis $ 100,000
Depreciation Year 1 7/28 * $ 100,000 $ 25,000
Depreciation Year 2 6/28 * $ 100,000 $ 21,429
Depreciation Year 3 5/28 * $ 100,000 $ 17,857
Depreciation Year 4 4/28 * $ 100,000 $ 14,286
Depreciation Year 5 3/28 * $ 100,000 $ 10,714
Depreciation Year 6 2/28 * $ 100,000 $ 7,143
Depreciation Year 6 1/28 * $ 100,000 $ 3,571
Computation of Depreciation under 200 % declining balance method
In a declining balance method the salvage value is not considered and the depreciation is applied on a declining balance on double the straight line method depreciation %
Depreciable Basis - same as cost $ 110,000
Depreciation Rate - 14.285 % * 2 = 28,57 %
Depreciation for Year 1 - $ 110,000 * 28.57 % = $ 31,427
Depreciation Basis for Year 2 $ 78,573
Depreciation for Year 2 - $ 78,573 * 28.57 % = $ 22,448
Depreciation Basis for Year 3 $ 56, 125
Depreciation for Year 3 - $ 56,125 * 28.57 % $ 16,035
Depreciation Basis for Year 4 $ 40,090
Depreciation for Year 4 - $ 40,090 * 28.57 % $ 11,454
Depreciation Basis for Year 5 $ 28,636
Depreciation for Year 5 - $ 28,636 * 28.57 % $ 8,181
Depreciation Basis for Year 6 $ 20,455
Depreciation for Year 6 - $ 20,455 * 28.57 % $ 5,844
Depreciation Basis for Year 7 $ 14,611
Depreciation for Year 7 - $ 14,611 * 28.57 % $ 4,174
Computation of Depreciation under 150 % declining balance method
In a declining balance method the salvage value is not considered and the depreciation is applied on a declining balance on one and half times the straight line method depreciation %
Depreciable Basis - same as cost $ 110,000
Depreciation Rate - 14.285 % * 1.50 = 21,4275 %
Depreciation for Year 1 - $ 110,000 * 21.4275 % = $ 23,570
Depreciation Basis for Year 2 $ 86,430
Depreciation for Year 2 - $ 86,430 * 21.4275 % = $ 18,520
Depreciation Basis for Year 3 $ 67,910
Depreciation for Year 3 - $ 67,910 * 21..4275 % $ 14,551
Depreciation Basis for Year 4 $ 53,359
Depreciation for Year 4 - $ 53,359 * 21.4275 % $ 11,433
Depreciation Basis for Year 5 $ 41,925
Depreciation for Year 5 - $ 41,925 * 21.4275 % $ 8,984
Depreciation Basis for Year 6 $ 32,942
Depreciation for Year 6 - $ 32,944 * 21.4275 % $ 7,059
Depreciation Basis for Year 7 $ 25,883
Depreciation for Year 7 - $ 25,883 * 21.4275 % $ 5,546
What do you believe are the top five characteristics of a good leader? What are the top five for a good manager? Discuss the similarities and differences between a manager and a leader. g
Answer:
The answer to characteristics of a good leader are:
1) Honesty
2) Communication
3) Sense of humor
4) Commitment
5) Creativity
The answer to a Good manager characteristics:
1) Leadership
2) Communication
3) Reliability
4) Time management
5) Experience
Explanation:
In understanding the difference between leaders and managers is that leaders have people follow them while managers have people who work for them. A successful business owner needs to be both a strong leader and manager to get their team on board to follow them towards their vision of success. Leadership is about getting people to understand and believe in your vision and to work with you to achieve your goals.
The similarities between a leader and a manager can be clearly seen as both rely on effective communication, both are accountable for results, both supervise groups or teams of people, both will typically evaluate employees.
Using your knowledge of SMART goals, select the best goal. I will start saving money toward a new house next week. I will save $40,000 by January 3, 2014, to use as a down payment on a home. I will buy a new house soon so my family will have a place to live. I will pay off my credit cards so I can start saving money for a house. g
Answer: I will save $40,000 by January 3, 2014, to use as a down payment on a home.
Explanation: SMART goals are:
Specific: they are well defined. Here, the goal is to save money towards the down payment of a house. It is clearly defined.
Measurable: it can be quantified with a number. The options, I will start saving money towards a new house does not state exactly how much. It can not be measured so it is impossible to say whether you have achieved the goal or not.
Achievable: It should be doable. We don't have enough information here to know if saving $40,000 by January 3 2014 is doable. For instance if the person setting this goal earns $80,000 per year and is setting this goal in 2012 or January 2013, it may be achievable. It is not if he makes $20,000 per year.
Relevant: the goal should be one that motivates you because it is important to you.
Time bound: There should be a time by which you want to achieve the goal.
The chosen option is the best goal of the because it meets more of the SMART goals criteria than the others: It is Specific, Measurable and Time-bound.
The best SMART goal for saving for a house down payment is 'I will save $40,000 by January 3, 2014,' since it fulfills all the criteria of being Specific, Measurable, Attainable, Realistic, and Time-oriented. The other options lack one or more of these critical components.
When applying the principles of SMART goals, the best goal selection would be 'I will save $40,000 by January 3, 2014, to use as a down payment on a home.'
This goal is Specific (saving $40,000), Measurable (has a clear monetary value), Attainable/Achievable (assuming the person has a plan and financial capacity to save that amount), Realistic/Relevant (since typical house down payments are between 3% and 5% of the purchase price, it matches real-world expectations), and Time-oriented/time-bound (with a clear deadline of January 3, 2014).
Conversely, the other options presented lack specificity, measurability, and timeliness, essential components of SMART goals.
For instance, saying 'I will buy a new house soon so my family will have a place to live' is not time-specific or measurable.
Similarly, 'I will start saving money toward a new house next week' is neither specific about the amount to save nor provides a target date to achieve it.
And, 'I will pay off my credit cards so I can start saving money for a house' is a precursor to setting a SMART goal but is not the goal itself for purchasing the home.
It does not state how the payment of credit card debt will transition into savings for a house nor does it offer a time-frame or specific amount to save for the house down payment.
A manufacturer of brand A jeans has daily production costs of Upper C equals 0.3 x squared minus 120 x plus 12 comma 585, where C is the total cost (in dollars) and x is the number of jeans produced. How many jeans should be produced each day in order to minimize costs? What is the minimum daily cost?
Answer:
a. 200 jeans should be produced each day in order to minimize costs.
b. The minimum daily cost is $108,585
Explanation:
a. How many jeans should be produced each day in order to minimize costs?
Given C = 0.3x^2 - 120x + 120,585 ........................... (1)
Cost is minimized when MC = C' = 0
To obtain MC, equation (1) is differentiate with respect to x as follows:
dC/dx = MC = C' = 0.6x - 120 = 0 ............................... (2)
From equation (2), we can now solve for x follows:
0.6x - 120 = 0
0.6x = 120
x = 120 ÷ 0.6
x = 200
Therefore, 200 jeans should be produced each day in order to minimize costs.
b. What is the minimum daily cost?
Substitute 200 for x in equation (1) to have:
C = 0.3(200^2) - 120(200) + 120,585
= 12,000 - 24,000 + 120,585
C = $108,585
Therefore, the minimum daily cost is $108,585.
a. 200 jeans should be produced each day in order to minimize costs.
b. The minimum daily cost is $108,585
Assume that the spot rate of the singaproe dollar is $.664. The ADR of a Singapore firm is convertibe into 3 shares of stock. The price of an ADRis $20. What is the share price of the firm in Singapore dollars
Answer: 10
Explanation:
1 ADR = $20
1 ADR = 3 Shares
Hence,
3 Shares =$20
1 share =$20/3
1 Singapore dollar =$0. 664
1$= 1/0.664 =1.506
20$ =20 x 1.506 /3
=10.10
The share price of the firm in Singapore dollars is $10.
The calculation is as follows:
1 ADR = $20
1 ADR = 3 Shares
So,
3 Shares =$20
1 share =$20 ÷÷3
1 Singapore dollar =$0. 664
Now
1$= 1 ÷ 0.664 =1.506
And,
20$ =[tex]20 \times 1.506 \div 3[/tex]
=10.10
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Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply. Providing tax breaks and patents for firms that pursue research and development in health and sciences Imposing restrictions on foreign ownership of domestic capital Protecting property rights and enforcing contracts Increasing taxes on income from savings
Answer:
1)Protecting property rights and enforce contracts.
2)Providing tax breaks and patents for firms that pursue research and development in health and sciences.
Explanation:
These two alternatives are the most applicable in relation to policies that are most consistent with the goal of increasing productivity and growth in developing countries. The first alternative is related to the protection of property rights and compliance with contracts, which guarantees stability and political confidence to the country, which is important to attract new investors and consequently to leverage the growth and development of a country.
The other alternative concerns tax incentives and patents for companies seeking research and development in health and science. What is a way to encourage the growth of this sector, which in addition to generating savings and productivity for the country, also brings innovations and relevant discoveries in health and science, which helps the growth and development of the country.
In order to earn some extra money to pay for college, you have decided to open your own tattoo parlor one block from campus. You come up with a business plan and realize that you will need financing to get your business off the ground. You appear on a reality show where you pitch your idea to potential investors. Someone likes your business idea, and they write you a check to get things going. Is this financing option direct or indirect?
Answer:
Indirect Financing
Explanation:
Direct financing is when the borrower borrows money directly from the market such as issuing the stocks/shares directly in the market.
While the indirect financing is the type of financing when the borrower does borrows the fund via the help of intermediaries or third parties.
Hope this helps and clear things up.
Thank You.
Answer:
The correct answer is: Indirect.
Explanation:
Indirect financing refers to pooling money from sources that are not from the entrepreneurs themselves. Investors come into play to provide entrepreneurs the capital needed for them to develop their business idea. For such a purpose, entrepreneurs make detailed business plans where they include different analyses of why the venture could be successful in an attempt to attract capital.
Under what conditions does a Cobb-Douglas production function,
q= 10L^0.71. K^0.84
Show how output changes if both inputs are doubled.
Answer:
Exhibits increasing returns to scale.
Explanation:
Given that,
Cobb-Douglas production function:
[tex]q=10(L)^{0.71}(K)^{0.84}[/tex]
If both inputs are doubled, then
[tex]q=10(2L)^{0.71}(2K)^{0.84}[/tex]
[tex]q=10(2)^{(0.71+0.84)}(L)^{0.71}(K)^{0.84}[/tex]
[tex]q=10(2)^{1.55}(L)^{0.71}(K)^{0.84}[/tex]
Therefore, this Cobb-Douglas production function exhibits the increasing returns to scale because the power of 2 is greater than 1. Under the condition of increasing returns to scale, an increase in the output of the firm is greater than the increase in the input of the firm.