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Tanzania [10]
3 years ago
11

For each of the scenarios, calculate the surplus and indicate if it is a producer surplus or a consumer surplus. Alice is willin

g to spend $30 on a pair of jeans, and has a coupon for $10 off which she found online. She selects and purchases a $35 pair of jeans which cost $35 pre-discount.
Business
1 answer:
elena-14-01-66 [18.8K]3 years ago
8 0

Answer:

Producer surplus.

Explanation:

Producer surplus is the difference between the price of a product they're willing to sell and the price they're gonna actually received. In this case she is willing to spend $30 + $10 coupon and she buys $35 pair of jeans.

So, she's only paying $30, that means seller is receiving $5 less.

Therefore, producer surplus is $5.

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"Mrs. Smith operates a business in a competitive market. The current market price is $8.10. At her profit-maximizing level of pr
STALIN [3.7K]

Answer:

Mrs.Smith should continue to operate the business in the short run but shut down in the long run.

Explanation:

According to the shut down rule, at the profit-maximizing positive level of output, a business in a competitive market should continue to operate in the short-term if the price equals to or is greater than the average variable cost, but should shut down in the long term if the price is less than or equal to total cost. Here,

price = $8.10

avg variable cost = $8.00

avg total cost = $8.25

Mrs.Smith should continue to operate the business in the short run but shut down in the long run.

8 0
3 years ago
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A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the fol
svetoff [14.1K]

Answer:

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. The following concepts can not be illustrated by this concept:

  • the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing.

Explanation:

  • A Production Possibilities Frontier also known as the Production Possibility Curve or Transformation Curve. This curve illustrates a country or a business is utilizing its resources effectively by showing the point at which that country or business is producing its products efficiently.
  • This curve is unable to tell you the flow of dollars between the seller and buyers of goods of a business or a country.
  • It only tells us about the production of goods not the flow of cash.
7 0
3 years ago
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Technology has proliferated in Kenya and Somaliland, with text messages used to replace cash, creating mobile money use that, on
olchik [2.2K]

Answer:

<u>True.</u>

Explanation:

This statement is true. In Kenya there is a system called M-PESA, which can be defined as a more developed payment system worldwide, this system acts as a tool that allows payments and purchases to be made via cell phone.

This system revolutionized the lives of the citizens of that region, due to the ease of being able to carry out commercial transactions and manage their money without needing a bank.

8 0
3 years ago
Given the acquisition cost of product ALPHA is $24, the net realizable value for product ALPHA is $23, the normal profit for pro
Novay_Z [31]

Answer:

$22

Explanation:

Given that,

Acquisition cost of product ALPHA = $24

Net realizable value for product ALPHA = $23

Normal profit for product ALPHA = $1.00

Market value (replacement cost) for product ALPHA = $21

By applying LCM, the per unit inventory value is determined by deducting the normal profit from the Net realizable value for product.

Per unit inventory value:

= Net Realizable Value - Normal Profit

= $23 - $1.00

= $22

Therefore, the proper per unit inventory value for product ALPHA applying LCM is $22.00.

4 0
3 years ago
If a journal entry and posting for the use of one month of rent from the prepaid rent account during the year is accidently omit
tensa zangetsu [6.8K]

Answer:

Expenses will be understated, hence, Net Income will be overstated.

Rent prepaid will be overstated, hence, current assets will be overstated.

Explanation:

Ordinarily, rent prepaid is meant to be credited every month to the tune of the the value that has been consumed and then added to period expenses to reduce net income.

In the statement of Financial Position, the same amount that has been consumed should be used to reduce balance in rent prepaid account, otherwise, current assets will be overstated if no adjustment is made.

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3 years ago
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