Prepare a monthly and yearly budget for Bill and Maura Jones based on the following information. They plan

An individual has the following demand function for gasoline:

grandymaker [24]

Answer:

Explanation:

From the information given:

$Q^d_{gas} = 15 - 3 P_{gas} + 0.02 I +0.11 P_{BT} -0.008P_{AUTO}$

$Q^d_{gas} = 15 - 3 (30) + 0.02(40000) +0.11 (25) -0.008(22000)$

$Q^d_{gas} = 15 - 90 + 800+2.75 -176$

$Q^d_{gas} = 551.75$

So, Income elasticity = $\dfrac{dQ^d}{dI}*\dfrac{I}{Q^d}$

$= 0.02 *\dfrac{40000}{551.75}$

= 1.45 which is greater than 1

It is positive → i.e. Normal good

The cross elasticity = $\dfrac{dQ^d}{dPBT}*\dfrac{PBT}{Q^d}$

$= 0.11 \times \dfrac{25}{551.75}$

= 0.0049 which is greater than 0

It is positive → hence they are substituents.

4 0

1 year ago

Classify each of the following costs as relevant or irrelevant to the decision at hand and briefly explain your reason. a. The p

jasenka [17]

Answer:

a. The purchase price of the old computer when replacing it with a new computer with improved features - Irrelevant cost

Sunk costs are considered irrelevant and the price of the old computer is a sunk cost as it has already been incurred.

b. The cost of renovations when deciding whether to build a new office building or to renovate the existing office building - Relevant

The cost of renovations will help the company decide which alternative is cheaper between building a new office or renovating.

c. The original cost of the current stove when selecting a new, more efficient stove for a restaurant. - Irrelevant

Like the first, this is a sunk cost so it is irrelevant.

d. Local tax incentives when selecting the location of a new office complex for a company’s headquarters. - Relevant

Local tax incentives could reduce cost of operation so is relevant when choosing headquarter location.

e. The fair market value (trade-in value) of the existing forklift when deciding whether to replace it with a new, more efficient model. - Relevant

The existing machine can be traded in for part of the cost of a new one using its market value to reduce the cost of the new one. It is relevant.

f. Fuel economy when purchasing new trucks for the delivery fleet. - Relevant.

Higher fuel economy can reduce cost of transportation so is a relevant cost.

g. The cost of production when determining whether to continue to manufacture the screen for a smartphone or to purchase it from an outside supplier. - Relevant.

This is a relevant cost because the it will help the company decide the cheaper alternative.

h. The cost of land when determining where to build a new call center. - Relevant.

Some land will be in areas that will have higher real estate prices. Your preferred cost of land will help determine which areas to look for locations in.

i. The average cost of vehicle operation when purchasing a new delivery van. - Relevant.

If this cost is too high it will increase expenses. It is a relevant cost to note for cost maximisation.

j. Real estate property tax rates when selecting the location for a new order processing center. - Relevant

Real estate taxes need to be known so that cost estimation can be made on the order processing center.

6 0

1 year ago

Assume Countries A, B, and C produce goods that are substitutes of each other and that these countries engage in trade with each

sveticcg [70]

Answer:

The answer is: C) decrease; increase

Explanation:

Currency appreciation occurs when the value of one currency increases in relation to another currency. In this case, country A´s currency will gain value against the currency of countries B and C (C´s currency is pegged to B´s currency).

This means that products from country A will be more expensive than products from countries B and C, which should lower country A´s exports and increase its imports.

6 0

1 year ago

I sell shoes for $250 per pair. They cost me $25 to produce. My markup on cost is:______

aalyn [17]

Answer:

Markup percentage= 900%

Explanation:

Giving the following information:

I sell shoes for $250 per pair. They cost me $25 to produce.

To calculate the markup percentage, we need to use the following formula:

Markup percentage= [(selling price - unitary cost)/unitary cost]*100

Markup percentage= [(250 - 25)/25]*100

Markup percentage= 900%

7 0

1 year ago

You decide to quit your $60,000-per-year job as an information technology specialist and illustrate children's books. At the end

Lesechka [4]

Answer:

- $45000

Explanation:

Economic profit is different from accounting profit in the sense that former also takes into consideration the implicit costs, also referred to as opportunity costs unlike the latter.

Economic Profit = Accounting profit - Opportunity Costs

Opportunity costs are defined as the the cost of sacrificed or foregone alternative for pursuing a particular alternative. Such costs are implicit or notional as they are not actually incurred.

In the given case, Economic Profit = Revenues - Explicit costs - Implicit costs

Here, the implicit cost is $60,000 income foregone.

Thus, Economic Profit = $20,000(income) - $ 5000 (expense) - $60,000 (opportunity cost)

Economic Profit = ($ 45,000) or -$45,000.

7 0

2 years ago