option d. is the right option
Answer:
The correct answer is a).
Explanation:
The income elasticity of demand refers to the percentual variation of quantity demanded of a certaing good in response to a percentual variation in income.
If the income elasticity of demand for medical care is 1.35,
<em>a. if income decreases by 1%, the quantity demanded for medical care decreases by 1.35%.</em> TRUE, this is what the definition implies.
<em>b. if the price of medical care increases by 1%, the quantity demanded for medical care decreases by 1.35%. </em>FALSE. In this elasticity, the sign is relevant. This income elasticity implies that changes in income and medical care expenses have the same sign.
<em>c. if the income of the average consumer increases by 1 dollar, the quantity demanded for medical care will increase by 1.35 units of care.</em> FALSE. The elasticity relates percentual variations, not absolute value variations.
<em>d. if income increases by 1%, the quantity demanded for medical care decreases by 1.35%.</em> FALSE. The same as point b.
Answer: 2 years
Explanation:
The payback period is the amount of time that is needed for the required cash inflow of a project to offset the initial cash outflow that the business offsets. The payback period is when the initial outlay of an investment is recovered. There are two different methods used to calculate payback period. We have the average method and the subtraction method.
In the above question, the payback period is solved as follows:
Labour cost decreases by 10% for each unit.
Therefore,
= $10 × 10%
= $10 × 0.1
= $1 per unit.
In order to recover $2000, the business needs to sell the following;
= 2000/1
= 2000units.
If Eric sells 1000 units per year of Emu, it will take:
2000/1000= 2years
In conclusion, the payback period of the investment is 2 years.
Answer:
d. Revenues increase, so total equity is increased.
Explanation:
Consulting Revenue of $700 will increase the total revenue of the business and total equity of the business as the revenue will increase the net profit which will ultimately be added to the equity balance. Increase in revenue will result in increase in equity and Increase in expenses will decrease the equity.
Answer:
will probably indicate less than $2 million in merchandise on hand.
Explanation:
Perpetual inventory system is when information regarding quantity and availability in inventory of a business is continuously updated. Sale or purchase big inventory is recorded immediately with the use of computerised point of sale systems.
The department store uses a perpetual inventory system. At year-end, it shows a balance in the merchandise inventory account of $2 million. The physical inventory will probably be less than $2 million because it adjust its records to make the recorded inventory amount agree with the actual inventory on hand at end of year.
