Answer:
The description including its given issue is discussed in the following subsections on the explanation.
Explanation:
The opportunity cost asserts that whenever the quantity of a commodity falls, it's as though the earnings of that same purchaser including its good started going up. The substitution hypothesis notes because as the rate of a decent increase, buyers will replace the cheapest good with products that seem to be comparatively more costly.
Throughout the cases of common goods, the substitution effect becomes negative, meaning that even if the alternative price decreases, the market for the same commodity increases.
Income influence also becomes negative throughout the case of typical goods, i.e., unless the cost of healthy food declines, it implies the buying power Rises because.
If Package of Chewing Gum's price drops, the income as well as substitution result would be the following factors:
- Substitution effect: Chewing cost reduces the market for gum even though it is comparatively cheaper nowadays. Moreover, even though chewing gum, as well as a lollipop, become ideal replacements for one another and, it would provide that customer with the same benefit such that the reduction in price would lead to higher demand.
- Income effect: Benefit of income: reduction in Chewing price change would raise the customer's buying ability because for the same earnings, nowadays the customer will afford more.
Currently, the need for chewing would be increasing due to increased customer productive capacity.
Answer:
Option a
Explanation:
In simple words, event refers to a potential situation that may or may not happen in the future and the occurrence or non occurrence of which depends on various factors in which some can be controlled by the affected party in advance and some are not.
These events could be either threat or opportunity. Although by using specialized knowledge these could be predicted at a certain level but its occurrence could not be guaranteed,
The tax policy in the given scenario is Progressive
.
<u>Explanation:
</u>
A progressive tax is based on low-income payers due to their ability to pay which places a lower corporate tax rate on lower-income payers relative to those with greater income. It implies that higher-income earners take a bigger share than low-income individuals.
A progressive tax is one for people who have received higher income and demand a higher tax. There is a reason for usually spending more of your income on keeping your standard of living by people with a lower income. Individuals who are wealthier will normally (and then some) provide the basic necessities of life.
The degree to which a tax system is progressive relies on how fast tax rates rise relative to income increases.
For example, if the tax code has a low 10% and a high 30% rate, and the income tax rate is between 10 and 80%, the latter is progressionary.
Answer:
The correct choice is C)
The most logical thing to do would be to calculate the value of the stock in 5 years time.
Explanation:
This speaks to ones understanding of dividend growth stock valuation models. These tools are used to establish a fair value for a stock by discounting the present value of its future dividends. A commonly used model is the constant growth dividend discount model.
The formula for the DDM, which assumes constant growth in dividends, is provided below.
P0 = D1/(r-g)
Where,
P0 = intrinsic value of stock
D1 = dividend payment one year from today
r = discount rate
g = growth rate
Identifying the correct answer entails establishing a timeline of the expected cash flows. We are given the following information:
t0 = $0
t1 = $0
t2 = $0
t3 = $0
t4 = $0
t5 = $0.20
t6 = $0.20 * 1.035
Given a rate of return, we could use the constant growth dividend discount model to establish the fair value of the firm at t5 (five years from today). Incidentally, to determine today's value, we'd discount it back another five years.
Based on the information above, we are able to prove that the answer is '5'.
Cheers!