Answer:
Explanation:
Deductible state income tax = $3,500 + $750 = $4,250
A political party is not a qualified charitable organization and it does not qualify for deductible charitable contributions.
Trade-offs between the ______ and the future require weighing the _____ available today against what will be available tomorrow. A good produced for present ______ is a ______ good; a good that will help in the production of other valuable goods for the _____ is a ______ good.
Answer:
The PresentThe benefitsConsumptionConsumer goodFutureCapitalExplanation:
Trade-offs between the now and the future demand that the opportunities available today be balanced against what should be available tomorrow. A product made for present use is a consumer product; a good that will aid in the future produce certain useful products is an investment good.Therefore, those above-written answers are correct.
An inexperienced internal auditor notified the senior auditor of a significant variance from the auditee’s budget. The senior told the new auditor not to worry as the senior had heard that there had been an unauthorized work stoppage that probably accounted for the difference. Which of the following statements is most appropriate?
A: The new auditor should have investigated the matter fully and not bothered the senior.
B: The senior used proper judgment in curtailing what could have been a wasteful investigation.
C: The senior should have halted the audit until the variance was fully explained.
D: The senior should have aided the new auditor in formulating a plan for accumulating appropriate evidence.
Answer:
The correct answer is letter "D": The senior should have aided the new auditor in formulating a plan for accumulating appropriate evidence.
Explanation:
For ethical and professional purposes, every time a piece of information is not clear several facts must be collected to complete the vague idea. In Auditing as in any other profession, the evidence must be gathered to confirm the company being audited is not committing fraud or forbidden practices.
Thus, in the example, the senior auditor should have helped the inexperienced editor in coming up with a plan to collect enough information about the budget difference. If that was not successful, they could have stopped the auditing until they received clarification of the situation.
Select all that are examples of how prokaryotes are beneficial to humans.
A. a bacteria causes Lyme disease
B. bacteria that live in the intestines of vertebrate animals
C. bacteria are used to clean up oil spills
D. bacteria are used in biomedical research
E. MRSA is resistant to methicillin
F. bacteria are used to develop medicines
Answer:
C. bacteria are used to clean up oil spills
D. bacteria are used in biomedical research
F. bacteria are used to develop medicines
Explanation:
Other kinds are harmful and not beneficial to humans
1. The new utility function u′ = ln(u) = ln(x^a.y^b)=a*ln(x)+b*ln(y).
What is MRS_x,y of this new utility function?
2. Will the MRS be still the same for each of the following transformation? Explain without directly solving for MRS.
a) u′=u2
b) u′=1/u2
c) u′=1987*u−507
d) u′=eu
Answer:
Explanation:
To begin, we will have to check for all 3 conditions on individual basis
Case one;
U'=U²
Not differentiating both side with respect to x and y we will arrive at below solution;
dU'/dx=2U*dU/dx
dU'/dy=2U*dU/dy
Hence we can say that
MRS of U'=MRS of U
Case Two;
U'=1/U²
U' = U⁻²
Not differentiating both side with respect to x and y we will arrive at below solution;
dU'/dx=(-2U^(-3))dU/dx
dU'/dy=(-2U^(-3))dU/dy
Hence we can say that,
MRS of U'= MRS of U
Case Three;
U'=1987U-507
Therefore, we can say that MRS of U'=MRS of U as differentiation will result the same yield.
Case Four;
U'=exp(u)
Not differentiating both side with respect to x and y we will arrive at below solution;
dU'/dx=exp(u) dU/dx
dU'/dy=exp(u) dU/dy
MRS of U'= MRS of U
3.
if we will consider a monotonic transformation of utility, then the properties of indifference curve of original utility will be equal to new utility. And due to same, it will not have effect on the marginal rate of substitution.
A. In an AE model with MPC = 0.80, the government increases spending by $100 million. What will be the increase in equilibrium Y in the Keynesian AE model?
Answer:
increase in equilibrium Y in the Keynesian AE model = 500
Explanation:
Formula AE Model = ΔY = 1/1-C * ΔG
Where ΔY = Change in National Income
Marginal Propensity to Consume =0.80
Change in government spending =100
ΔY = 1/1-0.8*100 = 1/0.2*100 = 5*100 = 500
Suppose that a certain fortunate person has a net worth of $76.0 billion ($7.60×10107.60×1010). If his stock has a good year and gains $3.20 billion (3.20×1093.20×109) in value, what is his new net worth?
If someone's net worth is $76.0 billion and their stock gains $3.2 billion, their new net worth will be $79.2 billion. Expressed in scientific notation, the new net worth is $7.92 × 10^{10}. This demonstrates how scientific notation can be used in practical applications involving large numbers.
Explanation:The student's question pertains to calculating the new net worth of a person after their stock has increased in value. First, the student has noted the current net worth as $76.0 billion, which expressed in scientific notation is $7.60 × 10^{10}. After gaining $3.20 billion in value, which is $3.20 × 10^{9} in scientific notation, we need to add this to the original net worth. The new net worth, therefore, becomes:
$76.0 billion + $3.2 billion = $79.2 billion
Expressed in scientific notation, the new net worth is:
$7.60 × 10^{10} + $3.20 × 10^{9} = $7.92 × 10^{10}
This calculation shows that a gain in stock value, even when it's in the billions, can have a significant impact on someone's net worth. It is also a practical application of scientific notation in understanding large numbers.
For taxpayers who do not itemize deductions, the standard deduction amount is subtracted from the taxpayer's adjusted gross income. True False
Answer:
The statement is: True.
Explanation:
The Adjusted Gross Income (AGI) is a measure based on individuals' gross income that serves as the basis for different deductions, among them, taxes. Taxpayers can request a tax credit based on certain expenditures that can be eligible for deduction. To do so, they must itemize those expenses in Form 1040 (Schedule A). Otherwise, the deduction will be based on the taxpayer's AGI.
"Which promotional strategy calls for spending a lot on advertising toward final consumers
Answer:
The correct answer is: Pull strategy.
Explanation:
A pull strategy is adopted by companies to attract customers massively. This type of marketing implies companies investing large amounts of money to achieve that objective under the belief that after they captured consumers' attention they could raise the product's price to compensate the expenditures.
The component of the service environment that involves products or services provided by an organization is/are called _______.a. The delivery systemb. The networkc. Deliverablesd. The organizational culture
Option A
The component of the service environment that involves products or services provided by an organization is/are called The delivery system
Explanation:
A system or scheme for rendering a good or aid to the society is termed as a delivery system. The essential factors for strong service delivery systems are defined which must be followed by every industry to meet their delivery system.
Producing the service delivery system should concentrate on what produces superiority to the central organizations and how to involve front-line workers to deliver the latest client action. The plan is power and continually assessing how both client and end-user observe service delivery is essential for constant collaboration.
A project portfolio is a useful storage medium that enables the project manager to consolidate all project information in a single, convenient location.
True or False?
Answer:
The statement is: False.
Explanation:
The project portfolio comprehends the group of projects the company has and how they strategically select one over another to meet the company goals. The project management allows the company plan according to the current situation the organization faces and allocates its resources as needed.
The project portfolio is not a storage medium.
The type of analysis that shows the percentage that each item in a financial statement is of some significant total such as total assets or sales is called:______
Answer:
The correct answer is: Vertical Analysis.
Explanation:
In Vertical Analysis each line item is presented as a percentage of gross sales. On the Balance Sheet, each line item in the Assets section is presented as a percentage of total assets. In the Liability and Equity section, each line item is presented as a percentage of total liabilities and equity which, based on the accounting equation, is equal to Total Assets. Vertical Analysis is mostly used on the Income Statement.
Assume that a radiology group practice has the following cost structure: Fixed costs = $500,000 Variable cost per procedure = $25 Furthermore, assume that the group expects to perform 7,500 procedures in the coming year. a. What is the group’s underlying cost structure?b. What are the group’s expected total costs?c. What are the group’s estimated total costs at 5,000 procedures? At 10,000 procedures?d. What is the average cost per procedure at 5,000, 7,500, and 10,000 procedures
Answer:
(a) $91.67
(b) $687,500
(c) $625,000; $750,000
(d) $125; $91.67; $75
Explanation:
(a) Underlying cost structure:
= [($25 × 7,500) + $500,000] ÷ 7,500
= $91.67
(b) Expected total cost:
= $500,000 + ($25 × 7,500)
= $687,500
(c) Estimated total cost at 5,000:
= $500,000 + ($25 × 5,000)
= $625,000
Estimated total cost at 10,000:
= $500,000 + ($25 × 10,000)
= $750,000
(d) Average cost per procedure at 5,000:
= [($25 × 5,000) + $500,000] ÷ 5,000
= $125
Average cost per procedure at 7,500:
= [($25 × 7,500) + $500,000] ÷ 7,500
= $91.67
Average cost per procedure at 10,000:
[($25 × 10,000) + $500,000] ÷ 10,000
= $75
The radiology group practice has a fixed cost of $500,000 and a variable cost per procedure of $25. The expected total costs for the group are $1,875,000. The average cost per procedure is $105 at 5,000 procedures, $250 at 7,500 procedures, and $225 at 10,000 procedures.
Explanation:The radiology group practice has a fixed cost of $500,000 and a variable cost per procedure of $25. This means that regardless of the number of procedures performed, the fixed cost remains the same, while the variable cost increases with each procedure.
To calculate the expected total costs, we multiply the number of procedures (7,500) by the variable cost per procedure ($25) and add the fixed cost ($500,000), resulting in $1,875,000.
For 5,000 procedures, the estimated total costs would be $525,000, and for 10,000 procedures, the estimated total costs would be $2,250,000.
The average cost per procedure can be calculated by dividing the total costs by the number of procedures. At 5,000 procedures, the average cost per procedure is $105. At 7,500 procedures (expected total), the average cost per procedure is $250. At 10,000 procedures, the average cost per procedure is $225.
Green Cleaners Inc., a U.S.-based company that specializes in environmentally-friendly cleaning supplies, has production facilities in Poland and Spain. Based on this information, Green Cleaners can be classified as what type of enterprise?
Answer: MULTINATIONAL
Explanation: MULTINATIONAL ENTERPRISE is any Enterprise that has its presence and does business in two or more countries. The presence can be in the form of Production facilities, Marketing facilities,joint ventures or even Franchise etc
Companies like Green Cleaners Inc., a U.S. company which has expanded to Spain and Poland are multinationals. Multinational organizations or enterprises have huge capital base through which they are able to acquire properties abroad.
Green Cleaners Inc. is classified as a multinational enterprise (MNE) because it has production facilities in both Poland and Spain. Multinational enterprises operate in multiple countries besides their home country. Green cleaning products focus on sustainability and environmentally-friendly processes.
Green Cleaners Inc., a U.S.-based company that specializes in environmentally-friendly cleaning supplies and has production facilities in Poland and Spain, can be classified as a multinational enterprise (MNE). A multinational enterprise is a company that has business operations in multiple countries, aside from its home country. In this case, Green Cleaners Inc. operates production facilities outside the U.S., making it a classic example of a multinational enterprise.
Green cleaning refers to using environmentally friendly ingredients and procedures designed to preserve human health and environmental quality. Companies that specialize in green products often avoid the use of toxic chemicals and emphasize the sustainability and biodegradability of their products.
Fruit thinning is practiced for peaches to increase the size of the remaining fruit (T/F)
Answer:
The statement is: True.
Explanation:
Fruit thinning is the process by which farmers remove some of the fruits growing on a tree so that the remaining can grow bigger and better. This practice is usually performed during the spring and it is useful to prevent limbs to break due to excessive weight.
The statement is true. Fruit thinning, which involves removing some fruits to let others grow bigger, is commonly practiced in peach cultivation. This practice enhances the size and often the sweetness of the remaining fruits, as nutrients are concentrated in fewer fruits.
Explanation:The statement is True. Fruit thinning is a practice performed in the cultivation of many fruit crops, including peaches. This practice involves selectively removing some fruits to allow the remaining fruits to grow bigger. The reason is that when a tree has too many fruits, resources such as water and nutrients are shared among all, leading to all fruits remaining small.
By thinning the fruits, the available nutrients and water are concentrated in fewer fruits, allowing these fruits to grow larger and often sweeter.Fruit thinning also helps to prevent the branches from breaking under the weight of too many fruits. Thus, the practice is beneficial in improving the yield and quality of the harvest.
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Rent-a-Furniture Center is offering a living room set that retails for $799 for $25 per week for 1 year. What is the percent markup on this furniture set?
Answer:
62.70%
Explanation:
The markup value is found by calculating the gross profit and dividing it by its price. The retail price for the Rent-a-Furniture Center is $799 and the selling is $25 per week.
There are 52 weeks in a year, therefore, with this payment plan of $25/week, the total amount in one year is (52* 25) = $1300. Gross profit is (1300- 799) = $501. The markup value is (501/799) = 62.7033%
Answer:
62.70%
Explanation:
A limited partnership: Multiple Choice a. has an unlimited life. b. can opt to be taxed as a corporation. c. terminates at the death of any one limited partner. d. has at least one partner who has unlimited liability for all of the partnership's debts. e. consists solely of limited partners.
Answer:
The correct answer is letter "C": terminates at the death of any one limited partner.
Explanation:
A partnership is an entity that runs a company with two or more owners. They share the profits in proportion to their relationship benefit in percentage terms. There are two types of partnerships: general partnerships (unlimited liability) and limited partnerships (liability proportional to the contribution to the partnership).
When one of the partners is removed, retires, or deceases or even when a new partner will be added, the partnership dissolves and a new partnership is formed.
When setting up an ecommerce shop, which stage of the searcher’s intent should youfocus?
a. Loyaltyb. Checkoutc. Purchased. None of the above
Answer:
Research
Explanation:
An e-commerce shop is an online based store where the seller lists items for sale and customers search and select and order the ones they would like to purchase. The stage of the searcher's intent an e-commerce owner would focus on is the research stage. Their website should always be at the top of the potential customers' search engines. This would increase the likelihood of them committing and making a purchase.
Final answer:
When setting up an ecommerce shop, focus on the checkout stage of the searcher's intent to improve conversion rates, by addressing concerns like shipping costs and utilizing strategies like follow-up emails and discounts.
Explanation:
When setting up an ecommerce shop, the focus during various stages of the searcher's intent is essential for successful conversions. Although each stage of the buyer's journey is important, the checkout stage is critical. This is where you have the opportunity to address and overcome last-minute hesitations that can lead to abandoned carts. Option B
By understanding factors like high shipping costs and uncertainty over taxes and surcharges, as identified through user surveys, a business can implement strategies to encourage users to complete their purchases. For example, implementing targeted actions such as sending automatic follow-up emails to customers who abandon their digital shopping carts or offering discounts and free shipping can significantly improve conversion rates. These insights can help you tailor the shopping experience to address the concerns and hesitations that customers face at the point of sale, thereby increasing the likelihood of completing a sale.
________is the process of getting to know one's contacts in a host country and building mutual trust before embarking on business discussions and transactions.
A)Exchange of task-related information
B)Relationship building
C)Conflict management
D)Persuasion
Answer:
The correct answer is letter "B": Relationship building.
Explanation:
Relationship building is the process in which international companies send representatives to their potential partners' countries to build trust between them with the main objective of showing each other how serious they are in establishing a business association. It also allows companies to break barriers and even starting a more familiar communication.
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $42,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2019. The 6% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection. 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2018 and 2019?
Answer:
Assumption: 6% rate has been taken to be on per annum basis and the question has been solved accordingly.
Following would be the journal entries to record the transaction:
On date of transaction:
June 30 Notes Receivable A/C Dr.$42,000
To Sales $42,000
(Being a note received against goods sold recorded)
Adjusting entry:
Dec 31 Interest Receivable Dr. $ 1,260
To Interest Revenue A/C $1260
(Being 6 months interest due recorded)
On due date of notes receivable
March 31 Cash A/C Dr. 43,890
To Notes Receivable A/C $42000
To Interest Revenue A/C $1890
(Being payment for notes receivable received along with interest recorded)
2. If the adjusting entry for interest accrual is not recorded, the income for 2018 would be understated by $1260 and income for 2019 would be overstated by $1260.
Anu’s Amusement Center has collected the following data for operations for the year: Total revenues $ 2,400,000 Total fixed costs $ 656,250 Total variable costs $ 1,350,000 Total tickets sold 75,000 Required:
a. What is the average selling price for a ticket?
b. What is the average variable cost per ticket?
c. What is the average contribution margin per ticket?
d. What is the break-even point?
e. Anu has decided that unless the operation can earn at least $131,250 in operating profits, she will close it down.
What number of tickets must be sold for Anu’s Amusements to make a $131,250 operating profit for the year on ticket sales?
Answer:
a)$32
b)$18
c)$14
d) 46,875 units
e) 56,250
Explanation:
a) calculate the average selling price for a ticket sold
the formula = Total tickets sold / The total number of tickets sold
= 2,400,000/ 75,000= $32
b) Calculate average variable cost per ticket sold
the formula = The total variable cost / the total number of tickets sold
= 1,350,000/75,000= $18
c) Calculate the average contribution margin per ticket sold
the formula= The selling price of tickets - the variable cost of the tickets
= $32-$18 = $14
d) Estimate the break-even point
The formula = the total fixed costs/ the derived contribution per unit
=656,250/14 = 46,875 units
e) Calculate the number of tickets to be sold to earn $131,250 profit
This is an estimation of target units based on target profit
Target Unit= (fixed costs + expected or target profit) / the Contribution per unit
=(656,250 + $131,250) / $14
=56,250 units need to be sold to arrive at the target profit
Final answer:
This response provides calculations for average selling price, average variable cost, average contribution margin, break-even point, and the number of tickets needed for a specific operating profit in a business scenario.
Explanation:
To calculate various indicators of Anu's Amusement Center's performance, we need to perform several financial analyses based on the provided data.
a. Average Selling Price for a ticket: Selling price per ticket = Total revenues / Total tickets sold. In this case: $2,400,000 / 75,000 = $32 per ticket.
b. Average Variable Cost per ticket: Variable cost per ticket = Total variable costs / Total tickets sold. $1,350,000 / 75,000 = $18 per ticket.
c. Average Contribution Margin per ticket: Contribution margin per ticket = Selling price per ticket - Variable cost per ticket. $32 - $18 = $14 per ticket.
d. Break-even point: Break-even point in tickets = Fixed costs / Contribution margin per ticket. $656,250 / $14 = 46,875 tickets.
e. Number of tickets for $131,250 operating profit: Extra tickets needed = (Fixed costs + Target profit) / Contribution margin per ticket. ($656,250 + $131,250) / $14 = 50,000 tickets.
At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $6,400. During the year, Buffalo reports net income of $6,700 and pays dividends of $1,400. In addition, Buffalo issues additional common stock for $6,200. Required: Prepare the statement of stockholders' equity at the end of the year (December 31)
Answer:
Total Stock Holder equity=$27900
Explanation:
Amount in the beginning:
Common Stock=$10000 Retained earnings=$6400
Stock Holder equity=Common Stock+ Retained earnings
Stock Holder equity=10000+6400
Stock Holder equity=$16400
During the year:
Net Income=$6700, Dividends=-$1400 (-ve shows less from total)
Additional Common Stock=$6200
Total Common Stock=$10000+$6200
Total Common Stock=$16200
Total Retained Earning=$6400+$6700-$1400
Total Retained Earnings=$11700
Total Stock Holder equity=Total Common Stock+Total Retained Earnings
Total Stock Holder equity=$16200+$11700
Total Stock Holder equity=$27900
Chao sells custom bicycles. He buys several bike parts including wheels and tires from Upright Strides, Inc. Although several government-supported regulations help Chao in his business, regulations that make it easy for his business to enjoy good vendor relationships are Select one: a. lower taxes that business-to-business customers pay to each other. b. laws that permit minimal corruption in banking institutions. c. laws that permit small businesses to use the government as an intermediary when doing business with other small businesses. d. laws that support enforceable contracts between firms.
Answer:
d. laws that support enforceable contracts between firms.
Explanation:
These laws will help and make it easy for his business to enjoy good vendor relationships as his rights will be enforceable
The Bank of Mesquite has $2 million in deposits and $550,000 in reserves. If excess reserves are equal to $150,000, the required reserve ratio is__________.
a. 15%.
b. 20%.
c. 35%.
d. 65%.
Answer:
b. 20%
Explanation:
First we have to calculate the reserves which were required by the Bank of Mesquite to be kept:
Reserves of the bank=required reserves+excess reserves
550,000=required reserves+150,000
Required reserve=$400,000
Now we have to calculate the required reserve ratio which shall be calculated as follows:
Required reserve ratio=Required reserve/deposits of the bank
=400,000/2,000,000
=20%
So based on the above calculations, the answer is b. 20%
Give two examples of services that have a good match between customer expectations and service delivery.
Answer:
The two example can be 1. Keeping up the date of delivery 2. Quality of the product
Explanation:
Let us consider the scenario of online shopping. A customer is ordering goods through an application and the expected service date which the application calculates is "so and so date" and the user has ordered based on quality and with the help of review of customer.
1. Date of delivery: It is necessary to keep up the dates so that it gives the best impression towards the service especially in a paid service. Late in delivery of goods creates an negative impression.
2. Quality: The customer might feel sometimes the rate is quite higher, but if you provide a quality product which is worth for the price, definitely the customer will come back to purchase more and sometimes even refer customers and bring business to your organization.
Customer expectations refers to the expectation of consumers on a ordered product while the service delivery means the expectation on the delivery of the ordered product.
Example of services that matches the expectations of customers:
A quick delivery of the products or on time delivery of the goods required by the customers. For example: Food delivery services to the customers from various restaurants and food joints.Online shopping applications or websites because they provide products based on customer's requirement with prompt delivery.
Example of services that do not match with the expectations of customers in terms of delivery:
A Courier services which are used by third party units may lead to customer dissatisfaction with delayed delivery of orders.
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Why is it difficult to develop accounting principles that are appropriate for governments within the same category (e.g., cities, counties) and even more difficult to develop them for governments within different categories?
Answer and Explanation:
The government with the same category may involve in different types of activities but those that are not within the same category may have little in common.
During the year, total liabilities increased $105,000 and stockholders’ equity decreased $83,000. What is the amount of total assets at the end of the year?
Answer: 22,000.
Explanation: 105,000-83,000 Is 22,000
Describe an activity, process, or product of your company that exhibits economies or diseconomies of scale. Describe the source of the scale economy. How could your organization exploit the scale economy or diseconomy
Answer:
Economies & Diseconomies of Scale
Explanation:
Economies of scale is: When the quantity of products produced by a company is increased the cost to produce those products decreases.
For Example big companies buy the products in bulk, this process decreases the cost of per unit of a product because the marginal cost of delivering 10000 bags of rice is very low as compared to 100 bags of rice.
Diseconomies of scale is: When a company tries to expand beyond its optimum size or scale average costs increase.
For Example Large companies face poor communication between the departments, they have coordination problems, motivation level of workers is very low.
The slope of the budget line represents the rate at which the consumer is willing to trade one good for another at any given bundle a. True b. False
Answer:
False
Explanation:
The slope of the budget line is the ratio of the prices of that bundle of goods. It represents the price at which a consumer would be willing to substitute one good for the other in the same bundle of goods.
I hope my answer helps you
You have a budget of $5,000. You want to buy email addresses, and each address costs $0.41. How many addresses can you purchase? a) 12,195 b) 13,251 c) 14,200 d) 15,220
a) 12,195 is the answer
You have a budget of $5,000. You want to buy email addresses, and each address costs $0.41. $12195 addresses you can purchase in $5,000. The correct option is a.
What is the main purpose of an email?A digital message delivered digitally over the internet from one computer to one or more others is known as an email. Emails are adaptable and can be used for a variety of purposes, including asking a question, providing a status update, recommending something, serving as documentation, confirming something, explaining rules and procedures, and delivering directions.
To calculate how many email addresses can be purchased with a budget of $5,000 at a cost of $0.41 per email address, we need to divide the total budget by the cost per email address:
$5,000 / $0.41 per email address = 12,195 email addresses. Therefore, the answer is 12,195 email addresses.
Thus, the ideal selection is option a.
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Loggers are much likely to supply wood to the market if property rights are enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. Market Failure Market Power Externality There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars. A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.
Answer:
much more likely;
There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars. - Market power
A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons. - Externality
Explanation:
Property rights are an incentive for individuals to create goods that are needed on the market. In other words, when a discrepancy between demand and supply occurs on a specific market, entities, businesses or individuals that create the goods are motivated to meet market needs through enforced property rights.
On the other hand, when there is a lack of property rights that regulate the market, market failures occur. Two common types of market failures include market power and externalities.
The car dealership example shows market power in practice, as the reigning company can dictate car prices.
The second example shows an externality, as there is evident influence (cost or benefit) on the third party, which they cannot change. People are affected (negatively) by smoke they did not create.
Loggers are much likely to under supply wood to the market if property rights are enforced.
There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars. - this would be classified as market power
A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.- this would be classified as an externality
Property rights define who legally owns a property. It also defines how the property can be used.
If property rights are enforced, logger would not be able to indiscriminately fell wood. This would reduce the quantity of wood that can be sold in the market.
A firm has market power when it is able to raise prices above the price that would prevail in a competitive environment.
The car dealership is an example of a monopoly.
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
Externality is when production or consumption activities have effects on third parties not involved in the activity
Smoking generates negative externality
A good has negative externality if the costs to third parties not involved in production or consumption is greater than the benefits.
People around a smoker are in danger of inhaling harmful second-hand smoke
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