Answer:
The price of the 1975 golf ball in 2005 is $0.55
Explanation:
In this question, we are asked to calculate the price of a golf ball in the year 2005 which was bought in the year 1975.
Before we begin to answer, we have been seeing CPI, what could this mean?
The term CPI stands for consumer price index. It refers simply to the change in price of a particular goods or services over a specific period of time.
Now, we mathematically propose a solution to the problem as follows;
We identify the following;
CPI in 1975 = 52.3
CPI in 2005 = 191.3
We now calculate the CPI change between the years. This can be done by dividing the CPI in the year 1975 by the CPI in the year 2005. Mathematically;
CPI change between years = CPI IN 1975/ CPI in 2005
= 52.3/191.3
= 0.273
Now, we proceed to calculate the price of the 1975 ball in 2005.
Mathematically;
A 1975 golf ball’s cost in 2005 = CPI change * price of golf ball in 2005
= 0.273 * 2
= $0.55
Answer:
Potential total surplus to increase.
Explanation:
As we know that:
Producer Surplus = Market value - Minimum price to sell
This means that for Juan:
Market value at which he can sell the ticket to Mara was $200 and the minimum price that he will accept will be $120
By putting values, we have:
Liam's surplus = $200 - $120 = $70
Now
Consumer Surplus = Consumer willing to Pay - Consumer Paid
For Alexander, the amount he was willing to pay was $250 and what he actually paid was $200 if the regulation hasn't intervened.
Alexander's surplus = $250 - $200 = $50
This means that the regulation prevents the increase in the potential total surplus and this has increased the dead weight loss of $120 ($70 + $50).
Answer:
$199,500
Explanation:
The computation of the margin of safety is shown below:
As we know that
margin of safety = Actual sales - break even sales
where,
Actual sales is
= Actual sales units × Selling price per unit
= 7,000 units × $38
= $266,000
And, the break even sales is
= Fixed cost ÷ contribution margin per unit
= $42,000 ÷ ($38 - $14)
= $42,000 ÷ $24
= 1,750 units
Now the break even sales is
= Break even units × selling price per unit
= 1,750 units × $38
= $66,500
So, the margin of safety is
= $266,000 - $66,500
= $199,500
Answer:
1.6
Explanation:
The formula and the computation of the price elasticity of supply is shown below:
Price elasticity of supply = (Percentage change in quantity supplied) ÷ (percentage change in price)
where,
Percentage change in quantity supplied = 16%
And, the percentage change in price = 10%
So, the price elasticity of supply is
= 16% ÷ 10%
= 1.6
Answer:
(a) $92,650; $107,520
(b) $1.09 per mile; $1.12 per mile
Explanation:
(a) March:
Total cost to operate the aircraft:
= Fixed cost + Variable cost
= $79,900 + ($0.15 × 85,000 miles)
= $79,900 + $12,750
= $92,650
April:
Total cost to operate the aircraft:
= Fixed cost + Variable cost
= $93,120 + ($0.15 × 96,000 miles)
= $93,120 + $14,400
= $107,520
(b)
Total costs per mile to operate the fleet in March:
= Total cost in March ÷ Miles flew in March
= $92,650 ÷ 85,000
= $1.09 per mile
Total costs per mile to operate the fleet in April:
= Total cost in April ÷ Miles flew in April
= $107,520 ÷ 96,000
= $1.12 per mile
