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Crazy boy [7]
3 years ago
8

Suppose two successive levels of disposable personal income increases from $16 to $21 billion and the change in consumption spen

ding between these two levels of disposable personal income is $2 billion, then the MPC will equal _____.
Business
1 answer:
Montano1993 [528]3 years ago
5 0

Answer: 0.4

Explanation: MPC, that is, marginal propensity to consume is used to quantify the consumption induced. As we know that, MPC is calculated as follows :-

MPC\:=\:\frac{Chane\:in\:consumer\:spending}{change\:in\:income}

MPC\:=\:\frac{2}{21-16}

MPC\:=\:\frac{2}{5}

                 = 0.4

You might be interested in
Zhao Co. has fixed costs of $429,000. Its single product sells for $187 per unit, and variable costs are $122 per unit. If the c
otez555 [7]

Answer:

$635,000 and : 34%

Explanation:

Margins of safety is the difference between expected sales and the break-even point.

For Zhao, expected sales are 10,000 units

The break-even points in units = fixed cost/ contribution margin per unit

fixed costs = $429,000

Contribution margin per unit = selling price - variable costs per unit

=$187 -  $122

=$65

break-even point in units = $429,000/$65

break-even point = 6600 units

Margin of safety = 10,000 - 6600 units

=3400 units

In dollars is equal to margin of safety in units x selling price

=3400 x 187

<u>=$635,000</u>

as a percent of expected sales.

=3400/10000 x 100

=0.34 x 10,000

=34%

4 0
2 years ago
Lewis Inc. owns 40% of Morgan and applies the equity method. During the current year, Lewis buys inventory costing $400,000 and
Alchen [17]

Answer:

The correct answer is a) $24,000

Explanation:

At the end of the year, Morgan still holds $140,000 of this merchandise

Lewis Inc. owns 40% of Morgan and applies the equity method

40% = 0.4

$140,000 x 40% = $56,000

Lewis buys inventory costing $400,000 and sells it to Morgan for $700,000.

$700,000 - $400,000 = $300,000

=$56,000 x ($300,000 ÷ $700,000)

=$56,000 x 0,428571429

= $24,000

7 0
3 years ago
Kyle, the human resources manager of an electrical company, is preparing an estimate of the recruitment requirements, training o
nordsb [41]

Answer: Tactical plan

Explanation: In simple words, tactical planning refers to the segmentation of strategic planning in shorter time periods. It focuses on determining the course of actions for departments of an organisation but for a short time period.

In the given case, Kyle is estimating various requirements of the organisation for next six months.

Hence from the above we can conclude that she is creating tactical plan.

5 0
3 years ago
Gannon Company acquired 10,000 shares of its own common stock at $20 per share on February 5, 2014, and sold 5,000 of these shar
DiKsa [7]

Answer:

The credit entry for the issue of 5000 shares is:

Cr Treasury stock                                       $100,000

Cr Paid-in capital from treasury stock          $35,000

Explanation:

The par value of the common stock issue($20 per share) is credited to treasury stock account, while the excess of issue price of $27 over the par value of $20, $7 per share is credited to paid-in capital from treasury stock

The full double entries for the issue of 5000 shares is as follows:

Dr Cash ($27*5000)                                                 $135,000.00  

Cr Treasury stock($20*5000)                                                          $100,000

Cr Paid-in capital from treasury stock($7*5000)                                $35,000

Under International Financial Reporting Standards, the credit entries would be that par value is credited to equity share capital and the excess credited to share premium account.

                                 

3 0
3 years ago
Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on t
Natasha2012 [34]

Answer: b. (200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars)

Explanation:

The opportunity cost of an airplane is 50 cars. This means that if the number of planes produced were reduced by 50, the number of cars should increase by:

= 50 * 50

= 2,500 cars.

In option B, the airplanes were 200 and then reduced by 50 to 150. This led to an increase in cars of:

= 15,000 - 12,500

= 2,500 cars

Option B therefore satisfies the constraints and is correct.

5 0
3 years ago
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