Answer: a tax equal to the external cost.
Explanation:
The most efficient taxes are those that will be equal to the external cost of production that a company is imposing on the environment. This means in effect that a company is paying for the pollution it is inflicting on the environment.
Companies polluting less would pay less and those polluting more would pay more. This is the logic of a tax equal to the external cost.
Answer:
Options C and E
Only Nick and Jake are optimising over his choice of fruit?
Explanation:
The marginal utility obtained from the purchase of a product is the amount of satisfaction derived from purchasing an additional unit of the product.
The utility is maximised when the satisfaction in terms of marginal utilities obtained from each product is equal to each other.
We obtain this simply by dividing the marginal utilities for each fruit by their price, and comparing them.
Dmitiri:
Apples: 8/1 =8
Pears: 10/2 =5
8/1 is not equals to 10/2
Frances:
Apples: 7/1 =7
Pears: 16/2 =8
7 is not equals to 8
Jake:
Apples: 6/1 =6
Pears: 12/2 =6
The marginal utility is equal hence Jake's choice is optimal
Latasha:
Apples: 5/1 =9
Pears: 9/2 =4.5
9 is not equals to 4.5
Nick:
Apples: 4/1 =4
Pears: 8/2 =4
The marginal utility is equal hence Nick's choice is optimal
Answer: High up-front costs.
Explanation:
Webster's limitation to owning a chain of incorporated bakeries would be the high up-front cost or capital needed to start up the company.
The up-front costs as in the case of the question is the money needed to start up the bakery company.
Answer:
0.1046 or 10.46%
Explanation:
The computation of the sustainable growth rate is shown below:
The Sustainable growth rate of the firm is
= Return on Equity × ( 1 - Dividend Payout Ratio )
where,
Dividend Payout Ratio = 30%
And,
Return on equity is
= Net Income ÷ Shareholder 's equity
= $3660 ÷ $ 24,500
= 0.14938
So,
Sustainable growth rate is
= 0.14938 × (1 - 30%)
= 0.1046 or 10.46%
Answer:
$278,000
Explanation:
Data provided:
Total invested capital or assets = $695,000
Total debt to total capital ratio = 40%
now,
= 
or
Total debt = 0.4 × Total capital
or
Total debt = 0.4 × $695,000
or
Total debt = $278,000
Hence,
The firm must borrow $278,000 to achieve the desired ratio
