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Elden [556K]
2 years ago
7

Diana is a personal trainer whose client Charles pays $80 per hour-long session. Charles values this service at $100 per hour, w

hile the opportunity cost of Diana's time is $75 per hour. The government places a tax of $10 per hour on personal trainers. Before the tax, what is the total surplus?
a. $25
b. $20
c. $5
d. $0
Business
1 answer:
Verdich [7]2 years ago
4 0

Answer:

Option (a) $25

Explanation:

Data provided in the question:

Amount paid by the client by Charles = $80 per hour

Value put for the service by Charles = $100 per hour

Opportunity cost of Diana's time = $75 per hour

Tax = $10 per hour

Now,

Consumer Surplus

= Value put up by buyer for service - Amount actually paid for service

= $100 - $80

= $20

Producer Surplus

= Amount actually paid for session - Opportunity cost of seller

= $80 - $75

= $5

Therefore,

The Total surplus = Consumer Surplus  + Producer Surplus

= $20 + $5

= $25

Hence,

Option (a) $25

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A company issued $50,000 of 8%, 10-year bonds on January 1. The bonds pay semi annual interest. The present value factor of a si
Ad libitum [116K]

Answer:

The present value of the par value of the bond is: $22,820.

Explanation:

As the characteristics of the bond, at the end of the bond period, which is 10 year, the bond's issuer will have to repay the face value of the bond to bond's holders. Thus, the future value of the bond = par value of the bond = 50,000.

As the bond pays coupon twice a year during 10 year with the coupon rate of 8% per year. There are 20 compounding periods, and the discount rate is 8%/2 = 4%. Thus, the present value factor of 20 periods at 4% is 0.4564 ( 1 / 1.04^20 ) should be used for calculating the present value of the par value of the bond.

 =>  Present value of the par value of the bond = future value of the bond x present value factor = 50,000 x 0.4564 = $22,820.

8 0
2 years ago
________ is a consultative function of the MIS department. Question 2 options: 1) Creating business alliances with business part
MAVERICK [17]

Answer: (1) Creating business alliances with business partner

Explanation:

 The MIS is stand for the management information system and it is one of the type of computerized database system which is basically used to store the financial based information in an organization.

 The consultative function is basically helps in producing the regular reports or information of the company's operation and also manage the system integration such as intranets and internet.  

 The main objective of the consultative function of the management information system department is to initiating the various types of business strategy and the business alliances with the business partner in an organization.

  Therefore, Option (1) is correct answer.  

      

5 0
2 years ago
.
Lesechka [4]

Answer:

This is the sample answer

Explanation:

After a natural disaster, such as a major hurricane, there is increased demand for gasoline, lumber, bottled water, clothing, and other essential goods as people try to replace and rebuild what was lost. At the same time, the supply of these goods likely decreases because of disruptions to factories and transportation. Under normal market conditions, producers would raise their prices at the first sign of trouble, both to offset their own losses from the disaster and to obtain optimal profits.

However, people who have lost everything need to start rebuilding as soon as possible at a price they can afford to pay. The sooner the community is rebuilt and back to normal, the sooner the local economy will return to normal for both consumers and producers. For this reason, I think the government should introduce price ceilings on essential goods during a disaster. Many people would not be able to buy the goods they need without price ceilings. Although producers lose out on maximizing their profits, their actual losses are limited because they are allowed to raise prices to cover production and transportation costs driven up by the disaster.

Because citizens benefit so greatly from them, I think emergency price ceilings are beneficial to the economy as long as producers do not suffer significant losses from them.

6 0
2 years ago
Reece has decided to start his own brewery. To purchase the necessary equipment, Reece withdrew $20,000 from his savings account
KengaRu [80]

Answer:

The opportunity cost is the income earned from her balance on savings account at the interest rate of 3% per year that Reece would received if she had not opened her owned brewery business. This opportunity cost is $600 per year.

Explanation:

Please find the below for further explanation and calculations:

The opportunity cost per one year = Income earned on saving account per one year = 20,000 x 3% = $600;

The reason why it is an opportunity cost is because as a result of opening brewery business, Reece sacrifices the income earned on this saving, instead, she contributes the saving fund to her brewery business.

8 0
2 years ago
Your boss would like your help on a marketing research project she is conducting on the relationship between the price of soda a
sattari [20]

Answer:

Your task is to take this <u>demand schedule</u> and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the <u>law of supply and demand .</u>

Explanation:

A demand schedule basically shows us the quantity demanded for a good or service at different price levels.

As the price of a good or service increases, the consumers will be less willing to purchase the good or service, therefore the quantity demanded will decrease. When the price of a good or service increases, this results in a higher opportunity cost for the consumer and a lower consumer surplus.  

Inversely, when the price of the good or service increases, the suppliers will be more willing to produce the good or service, therefore the quantity supplied will increase.

5 0
2 years ago
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