Answer:
1) Tires Ford buys to put on a car. - Included in GDP assuming that the tires are new, and produced domestically.
2) A used tire you buy for your personal car. - Not included because purchases of used goods are not part of GDP (they were produced in previous years, hence, were already calculated in a previous GDP).
3) A new tire you buy for your personal car. - Included in GDP because the tires are new.
4) The value of a car produced in the United States and exported to England. - Included in the U.S. GDP and excluded from the British GDP.
5) The profit earned in 2004 sale of a house you purchased in 2001. - Not a part of GDP because the house was built in 2001, thus, its value is already part of the 2001 GDP.
6) The commission earned by an employment counselor when she locates a job for a client. - Commission is included in wages, one of the elements of GDP, therefore, they are included.
Answer: a legal minimum on the price at which a good can be sold.
Explanation:
A price floor is the lowest price the government approves for a product sales, in other words the product cannot be sold below the price floor. The price floor is set to protect the sellers from running at a loss in case the market price of a product is less than the expenses made in producing/buying that product.
Answer:
Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry.
Explanation:
Monopolistic competition can be defined as a type of imperfect competition in which different companies produce similar products, but not absolutely identical. These products differ from each other by their quality and packaging. In monopolistic competition each company set the prices of their product based on the different costs incurred during production.
Oligopoly can be described as a market structure with a low number of different organisations. In oligopoly each firm has to right to influence the price of their products inorder to maximise profit.
Monopolistic competition and oligopoly market structure share a similar characteristic which is the barrier to entry.
We are given the following data for publishing an electronic textbook about spreadsheet applications for business.
Fixed cost = $160,000
Variable cost = $6 per book
Selling price = $46 per book
First, we have to establish an equation to know the profit or loss of the company.
Total cost = Fixed cost + Variable Cost (number of books)
Total sales = Selling price (number of books)
The profit is calculated by subtracting the total cost from the total sales.
Profit = Total sales - total cost
The following equations are useful:
let x = number of books produced
y = number of books sold
Total cost = $160,000 + $6x
Total sales = $46y
The value of x can be changed according to the actual number of books produced. y can be changed according to the actual number of books sold
Profit = $46y - ($160,000 + $6x)
If x = y = 3500
Profit = $22,000 for 3500 books
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