Explanation:
The computation of the price elasticity of supply using mid point approach is shown below:
a. The formula is shown below:
Price elasticity of supply = (Percentage change in quantity supplied ÷ percentage change in price)
b. The computation is shown below:
= ( Change in quantity supplied ÷ average of quantity supplied) ÷ (percentage change in price ÷ average of price)
where,
Change in quantity supplied would be
= Q2 - Q1
= 1,400 - 1,000
= 400
And, average of quantity supplied would be
= (1,400+ 1,000) ÷ 2
= 1,200
Change in price would be
= P2 - P1
= $24 - $23
= $1
And, average of price would be
= ($24 + $23)÷ 2
= $23.5
So, after solving this, the price elasticity of supply is 7.84 that reflects the supplies is elastic
Answer:
Cash flow items to be included in the investing section of the statement of cash flows under US GAAP
1. Cash received in sale of Equipment
2. Purchase of a piece of land
3. Sale proceeds from debt investments
Explanation:
Cash flow from investing activities is a section of the cash flow statement that shows the cash generated or spent relating to investment activities. Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets.
Some examples of investment activity from the company’s perspective would include:
Cash outflow from the purchase of an asset (land, building, equipment, etc.).
Cash inflow from the sale of an asset.
Cash outflow from the acquisition of another company.
Cash inflow resulting from a merger.
Cash inflow resulting dividends paid on stock owned in another company.
Answer:
If the reserve requirement is 20 percent, then excess reserves of $800 can increase M1 money supply by ___.
$3,200.
Explanation:
a) Data and Calculations:
Excess reserves = $800
Reserve requirement = 20%
Therefore, M1 money supply = $800/20% = $4,000
The increase in the M1 money supply will be $3,200 ($4,000 - $800)
b) The amount of funds that a bank is required by the central bank to hold in reserve to meet liabilities in case of sudden withdrawals by depositors is called the reserve requirement. It is usually stated as a percentage by the Fed Reserve. The Fed uses reserve requirement as a tool to increase or decrease money supply in the economy and influence interest rates. What the Fed does with the reserve requirement, therefore, depends on the monetary policy that it chooses to respond to the money market.
The after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. The correct option is C.
<h3>What is the externality of smoking?</h3>
The externalities of smoking refers to the costs imposed by smoking on people other than smokers themselves, in particular through the health effects of passive smoking and the effects of smoking on health care costs and productivity.
Therefore, The after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. The correct option is C.
Learn more about externality of smoking:
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