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LenKa [72]
3 years ago
7

Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.8.

Business
1 answer:
alexira [117]3 years ago
6 0

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

1). Price elasticity demand for cigarettes = 0.80

Government want to decrease smoking = 20% = 0.20

Require increase price rate = 0.20 ÷ 0.80 = 0.25 = 25%

Government Should Increase the Price by

= Current Cost of Cigarettes Pack × Require Increase Price Rate + Current Cost of Cigarettes Pack

= $5 × 25% + $5

= $1.25 + $5

= $6.25 a pack

2). If the government constantly increases the price of cigarettes, the impact on smoking will be higher in 1 year from now than in 3 months from now. It takes time to break a Smoking habit. And it takes people a long time to get out or reduce their smoking addiction.

3). According to the study, adolescents have a higher demand price elasticity than adults because adolescents have less income than adults, and they are more sensitive to price. If the price of cigarettes rises teenagers don't have enough funds to invest in their smoking habits because of their low savings and wages. Cigarette addiction in adults is more than youth addictions. And the demand for cigarettes among adults is difficult to reduce.

         

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(a) If the amount in Supplies Expense is the January 31 adjusting entry, and $850 of supplies was purchased in January, what was the balance in Supplies on January 1?

  • supply balance January 31 + supplies expense - purchases = $700 + $950 - $850 = <u>$800</u>

(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for one year, what was the total premium and when was the policy purchased?

  • Insurance expense per month = $400 x 12 months = $4,800, beginning balance prepaid insurance January 1 = $2,800. This means that the insurance policy was purchased ($4,800 - $2,800) / $400 = 5 months before, this means it was purchased in <u>August, 2016</u>.

(c) If $2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable on December 31, 2016?

  • wages payable on December 31, 2016 = salaries expenses + wages payable balance January 31, - paid salaries = $1,800 + $800 - $2,500 = <u>$100</u>

(d) If $1,600 was received in January for services performed in January, what was the balance in Unearned Service Revenue at December 31, 2016?

  • unearned service revenue on December 31, 2016 = cash received for providing services - service revenue + unearned service revenue balance January 31 = $1,600 - $2,000 + $750 = <u>$350</u>

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3 years ago
Which of the following would be a scientific theory? A the hypothesis that if you increase the temperature of water, then sugar
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D an explanation of why global temperatures are rising

Explanation:

3 0
3 years ago
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Randolph is a 30 percent partner in the RD Partnership. On January 1, RD distributes $15,000 cash and inventory with a fair valu
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$2,000 capital loss

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Randolph recognizes a $2,000 capital loss because RD distributes only cash and inventory and the adjusted bases of the property distributed is less than his basis in RD.

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(A) If variances are prorated at the end of the accounting period, an unfavorable direct materials price variance will, when pro
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Both A and B are correct.

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Variance analysis help the business to identify the deviation from their budgeted expenditures. The budget cost or volume is analyzed against the actual expenditure or production volume. Variance can be favorable or unfavorable. An unfavorable material price variance will increase the cost of finished goods.

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True or False: Without engaging in international trade, Freedonia and Lamponia would have been able to consume at the after-trad
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"Without engaging in international trade, Freedonia and Lamponia would have been able to consume at the after-trade consumption bundles" is FALSE.

<u>Option:</u> B

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Both countries are able to consume the goods they produce.When a country is skilled in manufacturing a good, it can manufacture this good at a lower cost of opportunity than its trading nation. For this comparative advantage, both countries benefit from competing and trading with one another.

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