Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer:
14 truck and 1 suv produce 21,800 profit
Explanation:
We have to solve for the contribution margin considering the constraing resourse which, is the ordering cost:
The card models revenue is calcualted using the net realizable value for each card, which is their sales price less the 5% sales commission.
Then we solve for how many truck will it purchase:
300,000 / 19,000 = 15,78
So the company will purchase 15 trucks
giving 15 x 1,425 = 21,375
This will require 2.5 x 15 = 37.5 hours thus 5 sales man (40 labor)
This creates 2.5 hours unsured
and also 300,000 - 15,000 x 19,000 = 15,000 dollar which are not productive
So, we will try to make a better use to purchase the SUV which is the second best option instead of the 15th truck:
giving 14 x 1,425 + 1350 = 21,300
we subtract the 500 dollar of sales man and get a 21,800 profit
with less unproductive dollar. So this will be the answer
Answer:
A) attached below
B)
C) The fiscal policy is called an automatic stabilizer because the taxes are dependent on the level of income and also the output of the multiplier is more stable because it doesn't respond to rapid changes in fiscal policies.
Explanation:
Given data:
C = Co + C1YD
T = t0 + t1Y
YD = Y - T
G and I are both constant
C1 lies between 0 and 1 while T1 lies between 0 and 1
A ) solving for equilibrum output
attached below
B) The multiplier
Multiplier =
The economy responds to changes in autonomous spending when t1 is 0 but responds less when t1 is positive, this is because the more positive t1 is the lower the multiplier value
c) The fiscal policy is called an automatic stabilizer because the taxes are dependent on the level of income and also the output of the multiplier is more stable because it doesn't respond to rapid changes in fiscal policies.
