Answer:
No, not at all. You should not go for producing that good.
Explanation:
A company do business in order to earn profits. A company earns profits by selling the product, good or service they produce or provide to the consumers. But if the cost of producing the goods is more than the profits earned due to that product, then there is no use of doing business. In order to earn profits, the cost of the product produced must be less than the price of that product. The price of the product should be set at a level which can cover all the costs incurred to produce that product. So in this question, if the price is $12 and cost is $40, then there is no need to product that product any more because this product is only incurring loss to the company.
Answer:
The amount that should be remitted to the vendor for merchandise is:
= $1,103.98
Explanation:
a) Data and Calculations:
Quantity Item List Price Item Amount
18 Billfold $25.00 each $450
6 Glasses case $15.00 each 90
21 French purse $30.00 each 630
9 Key case $12.50 each 112.50
Total amount of items $1,282.50
Trade discount (15%) 192.38
Amount due to be remitted 1,090.12
b) The trade discount is taken to be 15%. The credit term indicates "3/10 EOM, FOB store." These terms imply that 3% discount would be granted if payment is made within 10 days. The credit period is till the end of the month (EOM). Another implication is that the transportation charges of $13.84 would be borne by the vendor and not the buyer (FOB store). FOB store means Free on Board, meaning that the vendor bears full responsibility for the goods until they are delivered to the buyer at her store.
The terms of trade between two countries refers to what price the two countries agree upon for their imports and exports. Because, by definition, terms of commerce refer to the ratio of export prices to import prices.
<h3>What is terms of trade?</h3>
The ratio of the index of export prices to the index of import prices is known as terms of trade.
If export prices rise faster than import prices, a country's terms of trade improve, allowing it to buy more imports for the same quantity of exports.
Thus option A is correct.
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Answer:
- An increase in the family's car payment means the family will be unable to afford a vacation.
- A newer model offers better protection and functions but is more expensive than an older model.
Explanation:
A trade off is synonymous to opportunity cost. It occurs when one forgoes a best alternative when they chose another. In this case, if this family chooses to buy a new car, you answer the question by looking at the next best thing they are giving up. That could be a vacation; they may not afford it since they would spend the money to buy the car. Additionally, a new car has new parts and is safer than an old car but it costs more; that's also a trade-off.
Answer:
A. Substitution bias and the introduction of new goods.
Explanation:
The Consumer price index is a measure of the overall cost of goods and services (usually measured in fixed basket), purchased by a consumer in a year as compared to previous years. It gives the government and economists an idea of the cost of living of individuals in a nation. Some problems of the CPI include
1. Substitution Bias: The CPI assumes that prices of goods and services change in a fixed way as the years go by. It also does not consider the fact that sometimes some customers have preference for expensive items compare with the less expensive items. This is reflected in the OPEC case where it is automatically assumed that customers would prefer the cheaper hydrogen-powered engines to the gasoline engines.
2. Introduction of New goods: The CPI fails to recognize that new goods would enter a market because the CPI assumes a fixed basket of items and products. The introduction of new goods would affect comparisons to previous years' CPIs. The new good invented in the above case is the hydrogen-powered engine.
