Price ceiling and price floor are two types of price
controls. Price ceiling is the allowable highest price for a particular food or
service while price floor is the allowable lowest price. The government
determines the price for goods and services using either of the two price
controls only when it is not satisfied with the market price failure.
One short term benefit of price ceiling is imposing inexpensive
goods or services especially to low-income workers while for price floor is determining
a minimum value for wage to ensure minimum standard status of living. Thus,
price floor is more applicable in the labor market because it creates a
standardized minimum wage to protect workers’ rights. It is important to
consider such action to improve the financial status of the workers as well.
The longterm disadvantage of price ceiling is it results to
high demand and minimal supply which will lead to huge shortage, whereas for
price floor is increasing unemployment rate to offset expensive cost of labor
and benefits of employees.
For more detailed discussion of the answer, you can refer to the attached file.
Answer:
autoworker who is laid off from an automobile company due to a decline in sales caused by a recession.
Explanation:
Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;
I. Natural Rate of Unemployment (NU).
II. Frictional unemployment rate (FU).
III. Structural unemployment rate (SU).
IV. Actual unemployment rate (AU).
V. Cyclical unemployment rate (CU).
A cyclical unemployment can be defined as a type of unemployment which is typically related to changes in the business, economy or industry cycle such as recession, governmental policies etc.
Mathematically, cyclical unemployment rate can be calculated using the formula;
An example of cyclical unemployment is an autoworker who is laid off from an automobile company due to a decline in sales caused by a recession.
Answer:
Murphy Company
The year in which Murphy recognizes the income is year 2.
Explanation:
As a cash basis taxpayer, Murphy Company reports income and deductions in the year that they are actually paid or received. Similarly, as a cash basis taxpayer, Murphy Company deducts expenses in the year the expenses are paid off, which is not necessarily the year they were incurred. The income for services of $9,000 rendered to a customer, for which payment was received on January 3, year 2, will be recognized in year 2 and not in year 1 when the services were performed.
Answer:
$152,000 & $275,000.00 respectively
Explanation:
The cost of land will include legal fees;
Therefore: The cost of land is $ 150,000.00 + $ 2,000.00
=$152,000
Cost of building: Architect’s fees +Construction cost
=$25,000.00+$250,000.00
= $275,000.00
Answer:
Gross Profit 714,000
Explanation:
Gross Proft: is the diference between the sales revenue and the cost of the goods sold.
Sales revenue 1,254,000
Cost of Goods Sold (540,000)
Gross Profit 714,000
note: All the other account and values are irrelevant to determinate the gross profit.
<u>Other way to calculate gross profit:</u>
(sale price per unit - cost per unit) x unit sold