The study of how benefits are determined for city employees would be considered microeconomics.
This has to do with a study of a single factor and how it can impact a thing - so here, we are only considering the benefits for city employees, not a larger group of people, and not numerous groups of people, but rather just one factor. This is why it is called micro-, meaning small.
Answer:
1. AirEurope should produce if it wants to maximize its profit.
2. False
Explanation:
New payoffs after subsidy:
Aircraft/ AirEurope Produce Not Produce
Produce -3 , <u>6</u> 75 , 0
Not Produce 0 , 74 0 , 0
With a $9 million subsidy, regardless of whether Aircraft produces or not, AirEurope should<u> produce</u> if it wants to maximize its profit.
The statement is false (Aircraft would earn a negative payoff if it enters).
Answer:
Operating cash flow= 305.5
Explanation:
Giving the following information:
Your firm has net income of $385 on total sales of $1,480. Costs are $810 and depreciation is $120. The tax rate is 30 percent.
EBITDA= 385
Depreciation= (120)
EBIT= 265
Tax= (0.3*265)= (79.5)
Depreciation= 120
Operating cash flow= 305.5
Answer:
The correct answer is letter "D": The firm must be subsidized or it will go bankrupt.
Explanation:
A subsidy is a benefit given to an individual, business or institution, typically by the government. Subsidies are given to promote a social good or economic policy. The government usually provides subsidies in the form of cash or tax breaks, low-rate loans, and certain types of rebates.
In the example, as the commission sets the price of the monopoly products below the average total cost, it will be translated in losses. Then, a subsidy will be necessary to be provided otherwise the company will file for bankruptcy.
