Marginal Utility is described in this example.
The additional pleasure a consumer has from owning one extra unit of an item or service is known as marginal utility. Economists utilize the idea of marginal utility to estimate the quantity of a good that consumers will buy.
When the overall utility is increased by the consumption of an additional item, positive marginal utility occurs. On the other side, negative marginal utility arises when the overall utility is reduced by the consumption of one extra unit. To determine how consumer decisions are impacted by degrees of satisfaction, economists utilize the concept of marginal utility. The law of declining marginal utility is a principle that economists have also identified.
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If the volume of sales were to remain at 60,000 units, what price increase would be required to attain the 6 percent increase in profits? calculate the new price.
The new price is $44.966486
What is meant by Break-even point?
In economics, business, and particularly cost accounting, the break-even point is the point at which total cost and total income are equal, or "even." Although opportunity costs have been paid and capital has received the risk-adjusted, projected return, there is no net loss or gain, and one has "broken even." The break-even threshold is reached when overall costs and total revenues are equal, leaving your small firm with no net benefit or loss. In other words, you've achieved the point in production where the revenue from a product equals the cost of manufacture.
Giving the following information:
The company sells 74,000 units for $40 per unit.
The variable production costs are $17.
Fixed costs amount to $840,000.
Of the $17 variable costs, 50 percent are from labor and 25 percent are from materials.
Inflation:
Unit labor costs to rise by 15 percent
Unit materials costs to rise by 10 percent.
Variable overhead costs are expected to increase by 20 percent. Sales prices cannot increase by more than 10 percent.
It is also expected that fixed costs will rise by 10 percent.
New prices:
Direct materials= ($17*0.25)*1.10= $4.675
Direct labor= ($17*0.50)*1.15= $9.775
Manufacturing overhead= (17*0.25)*1.20= $5.1
Total variable cost= $19.55
Total fixed cost= 840000*1.10= $924,000
New sales price= 40*1.10= $44
1) Net profit before inflation:
Sales= 74000*40=$2,960,000
Variable costs= 17*74000= $1,258,000
Contribution margin= $1,702,000
Fixed costs= 840,000
Net profit= $862,000
Now, we have to maintain the level of profit with the new prices
Break-even point= (fixed costs+profit)/(contribution margin)
Break-even point= (924000+862000)/(44-19.55)
Break-even point= 73047 units
Sales= 73047*44= $3,214,068
2) Now, profit must increase by 11%.
net profit= 862000*1.11=$956820
Break-even point= (fixed costs+profit)/(contribution margin)
Break-even point= (924000+956820)/(44-19.55)
Break-even point= 76925.15units
Sales= $3,384,706.6
3)Now, Q=74000
net profit= 862000*1.11=$956820
Break-even point= (fixed costs+profit)/(contribution margin)
Break-even point= (924000+956820)/(P-19.55)
74000=(924000+956820)/(P-19.55)
74000P- 1446700= 1880820
P=(1880820+1446700)/74000
P=$44.966486
The complete question is,
Argentina Partners is concerned about the possible effects of inflation on its operations. Presently, the company sells 74,000 units for $40 per unit. The variable production costs are $17, and fixed costs amount to $840,000. Production engineers have advised management that they expect unit labor costs to rise by 15 percent and unit materials costs to rise by 10 percent in the coming year. Of the $17 variable costs, 50 percent are from labor and 25 percent are from materials. Variable overhead costs are expected to increase by 20 percent. Sales prices cannot increase more than 10 percent. It is also expected that fixed costs will rise by 10 percent as a result of increased taxes and other miscellaneous fixed charges. The company wishes to maintain the same level of profit in real dollar terms. It is expected that to accomplish this objective, profits must increase by 11 percent during the year. Required:
a. Compute the volume in units and the dollar sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented.
b. Compute the volume of sales and the dollar sales level necessary to provide the 11 percent increase in profits, assuming that the maximum price increase is implemented.
c. If the volume of sales were to remain at 74,000 units, what price increase would be required to attain the 11 percent increase in profits? Calculate the new price.
Tyra makes $21.40 per hour at her job for the first 40 hours and $32.10 for anything over 40 hours. if tyra typically works 45 hours per week, how much does she earn?
If Tyra typically works 45 hours per week, Tyra is paid $1016.5.
Tyra's pay at her employment is $21.40 for the first 40 hours and $32.10 for any further hours. If Tyra usually puts in 45 hours a week. Work overtime for Tyra is 45 minus 40 = 5 hours.
Tyra makes $40 for the first 40 hours since 40 x 21.40.= $ 856
Tyra makes $5 x 32.10 for work beyond 40 hours = $160.5
The sum of Tyra's earnings is equal to her earnings for the first 40 hours plus her earnings for any additional hours.
Adding the values from the previous, Tyra receives $1016.5
The Tyra thus receives $1016.5.
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The ________ concept is specifically focused on the future welfare of consumers.
The correct option is (A) Social marketing.
The social marketing concept specifically focuses on the future welfare of customers, but not on future company needs.
What is social marketing?Social marketing is a technique that makes use of marketing resources to encourage social change. Economic, environmental, and social reasons are promoted by social marketers. They raise topics including global warming, sustainability, public health, and poverty, among others.
How is social marketing used?In order to encourage the adoption and maintenance of healthy behaviours, social marketing now employs commercial marketing techniques. These techniques include target audience analysis, identification of targeted behaviour change objectives, message customization, and adaptation of branding strategies.
What characteristics define social marketing?Social marketing aims to alter people's behaviour for the betterment of society as a whole by utilising social science and commercial marketing ideas.
• Behaviour
• Focus on customers
• Theory
• Insight
• Exchange
• Competition
• Segmentation
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The complete question is :
“The ________ concept specifically focuses on the future welfare of customers, but not on future company needs.
A) societal marketing
B) strategic planning
C) sustainable marketing
D) marketing
E) selling”
According+to+___________________,+if+the+money+supply+grows+at+6%,+real+gdp+grows+at+2%,+and+the+velocity+of+money+is+constant,+then+the+inflation+rate+will+be+approximately
According to the quantity theory of money, if the money supply grows at 6%, real GDP grows at 2%, and the velocity of money is constant, then the inflation rate will be approximately
Quantitative Theory of Money
A subfield of economics called monetary economics examines various monetary ideas. The quantity theory of money is one of the main research areas for this school of economics (QTM). The general level of prices for goods and services in an economy is inversely correlated with the money supply, according to the quantity theory of money. Although the Polish mathematician Nicolaus Copernicus first proposed this hypothesis in 1517, Milton Friedman and Anna Schwartz later popularised it after the release of their book "A Monetary History of the United States, 1867-1960" in 1963.
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Incomplete Question
Who determines if a person or business process can be replaced by a robot or software?.
Chief Automation Officer determines if a person or business process can be replaced by a robot or software
What are the responsibilities of the Chief Automation Officer?A new position (area of responsibility) within the management of production and industrial companies is the Chief Automation Officer. Process automation results in a significant improvement in operational efficiency cost savings, and increased process flexibility, and as a result, becomes a source of strategic competitive advantage, necessitating the establishment of such a position.
The Chief Automation Officer is in charge of overseeing enterprise automation as a whole and creating the channels that support IT infrastructure, integrations, business processes, and other things. This allows the CAO to support this innovation with the necessary automation to make it as seamless, quick, and reliable as possible while the CIO concentrates on creating new processes and putting new strategies into place.
As a result, when developing and designing a project, automation comes first rather than developing a process and automating it later. Employee time is better used, repetitive tasks are automated, and departments approach automation in a much more planned manner.
Thus, it is the Chief Automation officer who is responsible for creating new designs of the project.
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By bundling share purchases of many investors together mutual funds can take advantage of economies of scale and thereby lower.
Mutual funds can take benefit from economies of scale and thereby lower transaction costs by bundling share purchases of many investors together.
You can "mutually" acquire stocks, bonds, and other investments through mutual funds, which allow you to combine your money with that of other investors. They are managed by qualified money managers, who choose which securities to acquire (stocks, bonds, etc.) and when to sell them. You have access to any investment made in the fund as well as any revenue it may provide.
Economies of scale are the cost advantages a company has as a result of increasing its output level. The benefit results from the inverse connection between the amount produced and the fixed cost per unit. The fixed cost per unit decreases as production volume increases.
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True or false if the opportunity cost of producing an apple is 1 orange for country a and 2 oranges for country b, there are terms of trade that allow both countries to benefit trade.
the opportunity cost of producing an apple is 1 orange for country a and 2 oranges for country b, there are terms of trade that allow both countries to benefit trade. True
Mutually Beneficial Trade with Comparative Advantage :
When nations increase its production in their area of comparative advantage and trade with each other, both countries can benefit. Again, the production possibility frontier is a useful tool to visualize this benefit.
What is opportunity cost and example?
The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.
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Company k incurs a $22,000 deductible expense. compute the current year tax savings from the deduction assuming that:_________
Company k incurs a $22,000 deductible cost. compute the modern-day year tax financial savings from the deduction assuming that: as this is a loss, any extra deduction will create extra losses, so no tax financial savings.
Before deduction earnings =65000
after deduction expense of 22000, taxable profits=65000-22000=43000
therefore the marginal tax price is 7%, which means tax financial savings = 22000*7%=1540
A tax is an obligatory charge or economic fee levied through any government on a character or an enterprise to collect revenue for public works presenting nice facilities and infrastructure. The gathered fund is then used to fund extraordinary public expenditure programs.
Taxes are the number one source of sales for most governments. among different matters, this cash is spent to enhance and hold public infrastructure, which includes the roads we tour, and fund public offerings, which include colleges, emergency services, and welfare programs.
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If there are no taxes, the economy is in equilibrium when disposable income equals?
There are no business taxes, no income taxes, and no social security taxes, so disposable personal income equals Net National Product (NNP).
The NNP is defined as the entire market value of the goods and services produced by a country over a given time period (often a year), less depreciation. The NNP is a tool that economists typically use to report on the development and strength of a nation-state. It can be used to compare a country's development to that of other nations.
NNP is calculated using the following equation: NNP = Market Value of Finished Goods + Market Value of Finished Services - Depreciation.
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One of the likeliest places to be involved in a property-damage only accident is?
Place your car in "park."
Defend you against approaching traffic.
When a vehicle collision occurs, it might be stressful, but it's crucial to keep in mind that your safety is always the top priority. Immediately upon being involved in a collision, keep in mind the following advice:
Verify your own health and the health of any passengers.
If you require medical asisstance or can't move your car, call "911" and follow the operator's instructions.
You should relocate to a safe area (such as the closest shoulder, the median, or the rightmost lane of the road) before exiting your car to examine the situation if it is still operational and neither you nor any of your passengers have been hurt.
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The portion of a long-term note that is due and payable within the next 12 months should be reported on the balance sheet as a?
The portion of a long-term note that is due and payable within the next 12 months should be reported on the balance sheet as a "current liability."
What is balance sheet?A balance sheet is a financial statement that shows a company's assets, liabilities, as well as shareholder equity at a given point in time.
Some key points related to balance sheet are-
Balance sheets serve as the foundation for calculating investor rates of return and assessing a company's capital structure.In a nutshell, a balance sheet is a financial statement that depicts what a company owns and owes as well as the amount of money invested by shareholders. Balance sheets can be used in conjunction with other main financial statements to perform fundamental analysis as well as calculate financial ratios. The balance sheet provides an overview of a company's finances at a given point in time. It cannot provide a sense of trends over a longer time period on its own.To know more about the balance sheet, here
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Dentify the three mobile device management policies. . bring your own device dual persona technology containerization company-issued, personally enabled choose your own device.
The three mobile device management policies are as follows:
Choose Your Own DeviceCompany-Issued, Personally EnabledBring Your Own DeviceWhat's the purpose of mobile device management policies?A mobile device management policy controls the use and security of mobile devices within your organization. Without mobile usage guidelines, your company is vulnerable to cybersecurity hazards, theft, and corporate espionage attempts.Mobile smartphones are some of the least regulated and most exposed devices utilized by employees. Once any tool leaves the confines of your office, your equipment and sensitive information are at risk due to the likelihood of security breaches.Contractors, part-time and full-time employees, and other staff members must all abide by MDM regulations if they access company data on a mobile device. If you hire contractors frequently, make sure to inform them of MDM guidelines and, if required, create non-disclosure agreements (NDAs).To know more about mobile device management policies visit:
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Managers should view employees' personalities as relatively fixed in the short run
true/ false
Managers should view employees' personalities as relatively fixed in the short run
This problem is true statement.
What is short run?
"A period of time known as the short run is one in which the levels of at least one stimulus are fixed although those of those inputs are variable. The time frame where all input quantities are flexible is known as the medium term. A company like ABC, which might make 10 cars per day, can serve as an example of a short run. In order to meet the heightened demand of the season, ABC intends to increase production to 15 trucks per day using the current infrastructure.
Therefore,
Managers should view employees' personalities as relatively fixed in the short run
This problem is true statement.
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If a $2 excise tax is collected from pumpkin buyers on each pumpkin sold, then the demand curve for pumpkins will shift __________ by $2, thereby _________ the equilibrium price.
If a $2 excise tax is collected from pumpkin buyers on each pumpkin sold, then the demand curve for pumpkins will shift Leftwards by $2, thereby Decreasing the equilibrium price.
Demand Curve
A demand curve in economics is a graph that shows the relationship between the cost of a given good and the amount that is desired at that cost. Demand curves may be applied to both the price-quantity connection for a single customer and the price-quantity relationship for all consumers in a given market.Is the demand curve going down or up?Slopes downhill
A demand curve often has a downward sloping shape, as previously mentioned. The demand curve for the majority of items, if not all of them, follows this rule. Rare instances of products with upward-sloping demand curves may exist. A Giffen good is one with an increasing slope on the demand curve.To Learn more about Demand Curve, Click the links,
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The development and growing popularity of flextime arrangements can largely be attributed to?
The spread of highspeed internet and technologies such as telecommuting and teleconferencing.
What Is Flextime?Flexible time, or flextime, is a work arrangement that gives employees the freedom to determine the start and end times for their workdays. Flextime gives workers the chance to better manage their time as they search for a better work-life balance. To accommodate clients and allow for meetings and collaboration, flextime, however, may require that workers be present in the office during specific hours.
Flextime functions best when work is either highly individualized or when asynchronous cooperation is made possible through technology. Only exempt employees frequently have access to flextime. Salary workers who are exempt from the minimum wage, overtime regulations, and other rights and protections granted to non-exempt employees are known as exempt employees.
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The goods available for sale total is __________.
a) $43,000
b) $11,000
c) $97,000
d) $69,000
The goods available for sale total is $97,000.
The question discusses more about:
What is sale?
A sale is a deal in which two or more parties trade goods or services for cash or other assets, usually between a buyer and a seller.
Therefore,
The goods available for sale total is __________.
a) $43,000
b) $11,000
c) $97,000
d) $69,000
Therefore,
The goods available for sale total is $97,000.
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In general, the irs may assess an additional tax liability against a taxpayer within how many years of the filing of the income tax return?
In general, the IRS may assess an additional tax liability against a taxpayer within five years of filing of the income tax return.
Internal Revenue Service (IRS) is a United States Government agency which is said to be responsible for collecting taxes and enforcement of tax laws like the wash sale rule. So the primary purpose of IRS is to collect employment and individual taxes.
Tax liability is regarded to be the total amount of tax debt which is owed to a government by an individual, corporation, or any other entity. Thus, the IRS only allows one to claim refunds and tax credits within three years of income tax return's original due date.
Hence, within five years of filing of the income tax return, the IRS may assess an additional tax liability against a taxpayer.
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According to the residual dividend model, what takes priority over distributing dividends? establishing a target payout ratio financing planned projects paying off debt increasing share price
The approach to residual dividend policy is based on the idea that a company's ideal distribution strategy depends on its intended capital structure, its investment prospects, and the cost and availability of outside capital. On the basis of the residual earnings, the company distributes money.
What Is a Residual Dividend?
The amount of dividends given to shareholders under a residual dividend policy is equal to the profits remaining after the company has paid for its capital expenditures and working capital expenses. Companies that follow a residual dividend policy employ available revenues to pay dividends to shareholders before funding capital expenditures. As a result, each year's dividend payments to investors will differ in size.
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In job order costing, the journal entry for the flow of direct materials into production consists of a group of answer choices debit work in process, credit materials debit work in process, credit supplies debit materials, credit work in process debit factory overhead, credit materials
In job order costing, the journal entry for the flow of direct materials into production is Debit work in process, credit materials.
When clients purchase discrete, tiny quantities of goods, a mechanism called job order costing is used. This approach establishes the cost of each particular product and makes sure that it is affordable enough for a client to buy it while yet enabling the business to turn a profit.
The cost of the partially finished products is tracked using the asset account known as the work-in-process inventory account. The value of the WIP inventory that was accessible at the beginning of the accounting period is included in the work-in-process inventory account.
Credit Materials are the references and attributions that include the appropriate symbols, graphics, and text that designate a Party as the creator of the Content (where applicable).
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If interest rates decline, which would you rather be holding, long-term bonds or short-term bonds?.
If interest rates decline you would as an alternative be holding lengthy-time period bonds due to the fact their price could boom greater than the price of the fast-time period bonds, giving them a better return. but, lengthy-term bonds have a more interest-charge risk.
Interest is charged from a borrower or deposit-taking monetary organization to a lender or depositor of an amount above compensation of the predominant sum, at a particular charge. it's miles awesome from a rate which the borrower may also pay the lender or a few third celebrations.
Interest is described as the amount of money paid for using someone else's money. An example of the interest is the $20 that became earned this 12 months on your savings account. An example of the interest is the $2000 you paid in interest this yr on your home loan.
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These financial conglomerates provide a range of services, such as investment banking, commercial banking, and financial advising.
Financial Services Corporations: this is a financial conglomerate that provides a range of services, such as investment banking, commercial banking, and financial advising.
This is further explained below.
What is financial advising.?Generally, A specialist who offers customers a variety of financial services after analyzing their current monetary circumstances is known as a financial consultant or financial advisor.
In order to give advice to clients, financial advisors are required to have completed specialized training and to be registered with the appropriate regulatory authority in many countries.
A company that provides a comprehensive array of financial services, such as investment banking, brokerage operations, insurance, and commercial banking, all under one roof.
In conclusion, Financial Services Corporations are a kind of financial conglomerate that offers a variety of services to their customers.
These services include investment banking, commercial banking, and financial advisory services.
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complete question
These financial conglomerates provide a range of services, such as investment banking, commercial banking, and financial advising.
What type of financial Institution?
Swiss franc jan 94 calls on the phlx are quoted at 2. the contract size is 10,000 swiss francs. what is the total premium for 1 contract?
The total premium for 1 contract is $200.
Given,
Swiss franc Jan = 94 calls
PHLX are quoted at 2
Contract size = 10,000 swiss francs
Total premium for 1 contract = ?
The world currency options are standardized, using a multiplier of 100 applied to the premium.
A premium of 2 × multiplier of 100 = $200 total premium per contract.
Since 1 contract is purchased, 200 × 1 contract = $200 total premium.
Thus, is can be also calculated as, contract size = 10,000 units of currency x a premium of 1/2 cent ($2) = $200 per contract x 1 contract = $200.
Hence, the total premium for 1 contract is $200.
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A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate. part 2
A decrease in the discount rate increases bank reserves and increases the money supply if banks respond appropriately to the change in the rate.
What is meant by discount rate?The rate of return employed in corporate finance to bring future cash flows down to their present value is called a discount rate. This rate is frequently referred to as a company's Weighted Average Cost of Capital (WACC), needed rate of return, or hurdle rate, which refers to the rate of return investors must achieve relative to the risk involved in the investment.
A decrease in the discount rate lowers the cost of borrowing for commercial banks, which increases the amount of credit that is accessible and lending activity across the economy.
When the Fed reduces the discount rate, the economy as a whole experience an increase in surplus reserves in commercial banks, which boosts the money supply. On the other hand, when the Fed increases the discount rate, the money supply is constrained and the excess reserves in commercial banks are reduced.
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If the federal funds market is at equilibrium at point c and the federal reserve decides to conduct an open-market sale, then it must be trying to set a:______
Lower the market's reserve level to increase the target federal funds rate.
How Do Federal Funds Work?
Federal funds, often known as fed funds, are surplus reserves that commercial banks and other financial institutions deposit with regional Federal Reserve banks. These funds can subsequently be lent to other market participants who lack the necessary cash on hand to meet their lending and reserve needs. Since the majority of these loans are issued for the overnight period, they are unsecured and have a relatively low interest rate known as the federal funds rate or overnight rate.
Federal funds are extra reserves that financial institutions hold over and above the central bank's mandated reserve requirements.
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An increase in inventories will increase which component of gross domestic product?
An increase in inventories will increase the Investment expenditures component of gross domestic product
This is further explained below.
What is the gross domestic product?Generally, The total monetary worth of all completed products and services produced inside a nation over a certain time period is referred to as the country's gross domestic product (GDP).
The GDP gives a snapshot of a country's economy, which may be used to determine the size of an economy as well as its growth rate.
In conclusion, An increase in inventories will result in a rise in the component of gross domestic product that measures investment expenditures.
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Thomas jefferson disagreed with alexander hamilton’s economic plan primarily because he feared that it would.
The main reason why Thomas Jefferson opposed Alexander Hamilton's economic plan was because he believed it would favor urban mercantile interests over agricultural ones.
In Hamilton's proposal, the federal and state debts would be paid off by the government. He demanded that the government acquire all of the bonds issued before 1789 by the federal and state governments. Then, he intended to issue fresh bonds to settle the previous debts. The government would then be able to repay the new bonds as the economy improved. Many people supported Hamilton's plan, including bankers and investors. They assaulted it.
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If you wanted to understand the overall profitability of a company, you would study the _______ section of the marketing plan.
If you wanted to understand the overall profitability of a company, you would study the Financials section of the marketing plan.
This is further explained below.
What is the marketing plan.?Generally, There is a possibility that a marketing strategy will be included in an overall company plan.
To ensure that one's objectives are met, an effective marketing strategy must serve as the basis of an organized and detailed marketing plan.
A marketing plan could include a to-do list, but if it does not have a solid basis in terms of strategy, it is not going to be of much help to a company.
In conclusion, You should read the portion of the marketing plan under "Financials" if you are interested in gaining an understanding of the total profitability of a firm.
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Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but tom is better at producing both goods. In this case, trade could.
In this case, trade could benefit both Steve and Tom.
What is trade?
Trade, which is typically done in exchange for money, is the transfer of goods and services from one person or institution to another. Economists refer to a system or network that allows trading as a market.
While Tom makes baseball bats and gloves. Baseball bats and gloves are another product that Steve makes, but Tom excels at both. Here, a trade might be advantageous to both Tom and Steve. The fundamental reasoning behind this response is that even though Steve is not better at making baseball gloves and bats than Tom, he can still compete with him because Tom's higher-quality goods will encourage Steve to produce something slightly more superior in order to keep him in the market and in the competition. However, when Steve isn't creating as many high-quality goods, Tom will get a competitive advantage, which will undoubtedly assist him to increase his revenues and win over more devoted clients. As a result, in this cycle, both Steve and Tom will benefit.
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Imagine two economies that are identical except that for a long time, economy a has had a money supply of $1,000 billion while economy b has had a money supply of $500 billion. it follows that.
Imagine two economies that are identical except that for a long time, economy a has had a money supply of $1,000 billion while economy b has had a money supply of $500 billion. it follows that the economy with extra money.
If the govt takes no action to counter this, then the particular price index is below the worth level that individuals expected. Various factors can shift both the short-run economy and long-run aggregate supply curve rightwards like an increment within the technology level, a rise within the level of human capital, a rise within the level of existing capital stock, et cetera.
When the economy is doing well, the financial market is additionally certain to have best. Whether or not the economy is declining, the financial market can still do best. A pecuniary resource increase will tend to lift the worth level within the future. A finances increase can also increase national output.
A funds increase will raise the economy worth level more and national output less the lower the per centum of labor and capital is. A rise within the pecuniary resource level in an economy within the short run translates to a decline in charge per unit. the autumn within the rate further causes an increase in investment because of borrowing costs.
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Miller co. had the following retained earnings statement with certain numbers missing.
rogers co. retained earnings statement for year ended dec 31
begingning retained earnings, jan 1 $44,300
net income $15,900
dividends _______
net change in retained earnings 11,00
ending retained earnings , dec 31 $____
required:
complete the retained earnings statement, filling in the missing amounts.
Retained Earnings = Beginning Period Retained Earnings + Net Income/Loss – Cash Dividends – Stock Dividends
To determine retained earnings, divide a company's liabilities by its assets to determine stockholder equity. Next, locate the common stock line item on your balance sheet and deduct that amount from the total stockholder equity (if the only two items in your stockholder equity are common stock and retained earnings).
The Statement of Retained Earnings is the second financial statement that needs to be prepared during an accounting cycle. This is the amount of income that remains in the business after dividends, which are frequently reinvested in it or distributed to stockholders.
Retained Earnings (RE) are the accumulated portion of a company's profits that are set aside for reinvestment rather than being paid out as dividends to shareholders. These monies are typically allocated for debt repayment or used for working capital and fixed asset purchases (capital expenditures).
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