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tiny-mole [99]
3 years ago
9

Suppose you manage a convenience mart and are in charge of ordering products but do not set the price. The home office provides

the prices. In your area, the income elasticity of demand for peanut butter is -.05. Due to local factory closings, you expect local incomes to decrease by 20% on average in the next month. As a result, you should stock:
a) 20% more peanut butter on the shelves
b) 5% more peanut butter on the shelves
c) 10% more peanut butter on the shelves
d) 10% less peanut butter on the shelves
Business
1 answer:
lakkis [162]3 years ago
5 0

Answer:

c) 10% more peanut butter on the shelves

Explanation:

Since peanut butter has a negative income elasticity of demand (-0.5) with a decrease in income, there should be an increase in the demand. This is usually true for cheaper goods or goods with low added value. The change in demand (D) is represented as follows:

D=20\% * 0 .5\\D=10\%

As a result, you should stock 10% more peanut butter on the shelves.

The answer is c).

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Hedge funds are low risk because they are market-neutral. low risk if they buy Treasury bonds. low risk because they hedge their
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Answer:

Hedge funds are: high risk, even though they may be market-neutral.

6 0
3 years ago
The following information is for Redwood Inc. for the year ended December 31, 2016. Redwood had a cash and cash equivalents bala
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Answer and Explanation:

The preparation of the cash flow statement using the direct method is presented below:  

                                         Redwood Inc.

                                     Cash flow statement

                        For the year ended December 31, 2016

Cash flow from operating activities

Cash Received from Customers $1,940

Interest on investments $220

Less: Interest on debt -$320

Less: Income tax -$84

Less: Purchase of inventory -$1,000

Less: Operating expenses -$520

Net cash provided by operating activities $236

Cash flow from investing activities  

Sale of land $120

Less: Purchase of equipment -$4,500

Net cash used by investing activities -$4,380

Cash flow from financing activities  

Sale of common stock $640

Issuance of debt securities $2,040

Less: Debt principal reduction -$1,540

Less: Dividends on common stock -$220

Net cash provided by financing activities $920

Decrease in cash -$3,224

Add: Beginning cash balance $5,600

Ending cash balance $2,376

The items which shows in a positive sign indicates the cash inflow and the items which shows in a negative sign indicates the cash outflow and the same is to be considered

5 0
3 years ago
Dr. Dawson is considering two business opportunities. Both require an initial investment of $200,000. The first will return $50,
Step2247 [10]

Answer: please refer to the explanation section

Explanation:

Investment $200 000, Profit = 50 000 and n = 6

Present Value(using 7%) = 50000/ (1 + 0.07)^6 = 33317.11

Present Value(using 8%) = 50000/ (1 + 0.08)^6 = 31508.48

Present Value(using 9%) = 50000/ (1 + 0.09)^6 = 29813.37

Present Value(using 10%) = 50000/ (1 + 0.10)^6 = 28223.70

Present Value(using 7%) =  50000/ (1 + 0.12)^6  = 25331.56

Investment $200 000, Profit = 35 000 and n = 10

Present Value(using 7%) = 35000/ (1 + 0.07)^10 = 17792.23

Present Value(using 8%) = 35000/ (1 + 0.08)^10 = 16211.77

Present Value(using 9%) = 35000/ (1 + 0.09)^10 = 14784.38

Present Value(using 10%) = 35000/ (1 + 0.10)^10 = 13494.02

Present Value(using 12%) =  35000/ (1 + 0.12)^10  =  11269.06

All present value figures have been rounded of to two decimal places

 

7 0
3 years ago
ginger's baby weighed only 3 3/8 pounds when it was born. the doctor said it could not leave the hospital until it weighed 5 1/2
Jet001 [13]
It must gain 1.375 pounds more before it can leave.
3 0
3 years ago
There are 100 consumers, each of whom values a concert ticket at a unique whole number dollar amount between $1 and $100. One cu
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Answer:

To total Consumer Surplus in the market = $3,612.50

Explanation:

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is the amount that buyers are willing and able to buy at a particular price.

The demand curve:

shows how much buyers are willing and able to buy at different prices.

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and its market price.

5 0
3 years ago
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