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2 years ago

f the government imposes a binding price ceiling in a market, then the producer surplus in that market will increase.

Business

1 answer:

Anit [1.1K]2 years ago

6 0

Answer: This statement is FALSE

Explanation:

Price Ceiling is the maximum price fixed by government , usually less than equilibrium price to make necessity goods affordable to max people.

Producer Surplus is the difference between prevailing price & minimum price needed to induce producers to supply . Diagramaticaly / Graphicaly , it is the vertical difference between supply curve & price level

Implying Ceiling Imposition , the price gets reduced . Assuming unchanged Supply curve , the difference between price & supply curve reduces .

Hence , Producer Surplus falls

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Many economists argue that, in the long run, the economy self-corrects and achieves full employment. What is this argument calle

Serggg [28]

Answer:

Classic Model

Explanation:

Classical economists brought the view of market economy for the most effective solution of economic problems. They advocated that economic problems would be solved spontaneously and within the framework of the possibilities, if the rules of the market economy were followed, and they defined the state as a unit that operates in a limited area and does not interfere with the economy.

Classical economists argued that the economy would automatically stabilize at full employment level under conditions of full competition.

The basis of the classical model is the assumption that the economic units are rational. Consumers try to maximize their benefits, while manufacturers try to maximize their profits. Classical economists argue that the state should not interfere with the economy. Because, according to the classics, the economy will always be fully employed and the general level of prices will always make a certain level of decision. The state does not need to get involved in the economy in order to reach full employment and to get rid of excessive price movements such as inflation and deflation. The "invisible hand" in the economy provides spontaneous full employment and price stability.

The basic assumptions of classical economic theory are as follows;

- Full competition conditions apply in the economy.

- Fees, interest rates and commodity prices are flexible.

- Each supply creates its own demand. (Say's Law)

- In the economy, money is demanded only for trading purposes, money is neutral. Money supply only affects the absolute price level, not relative (relative) prices and the real economy.

The classic model was popular before the Great Depression. It was said the economy was developing freely and that prices and wages were adjusted according to the time-consuming ups and downs. In other words, when times are good, wages and prices are rising rapidly, and when times are bad, wages and prices are set free. The main assumption of this model is that the economy is always in full employment, that is, everyone who wants to work is fully trained and able to work from all sources. Classical economists believe that the economy is self-adjusting, meaning that no one needs help in the event of recession. This is a Classic Model.

3 0

2 years ago

An invoice is an example of which of the following?

Scilla [17]

A source document

This document, when coupled with a bill of lading and/or packing list, can be used to invoice a customer, which in turn generates a sale transaction. Supplier invoice. This is a source document that supports the issuance of a cash, check, or electronic payment to a supplier.

8 0

3 years ago

El Toro Corporation declared a common stock distribution to all shareholders of record on June 30, 20X3. Shareholders will recei

Natasha2012 [34]

Answer:

This distribution is not taxable since Raoul is not earning any money at all (dividend income = $0), but the tax basis on the stocks that he holds will vary.

Before the distribution, Raoul had 310 shares, each share with a $60 tax basis. After the distribution, Raoul will have 465 shares, each share with a $40 tax basis.

7 0

3 years ago

What is the end product of the accounting process?

Goryan [66]

In the accounting cycle, the last step is to prepare a post-closing trial balance.

3 0

3 years ago

Exercise 13-17 Swifty Company has been operating for several years, and on December 31, 2017, presented the following balance sh

mixer [17]

Answer:

(a) Current ratio = 2.746

(b) Acid-test ratio = 1.423

(d) Return on assets = 6.15%

Explanation:

For Balance Sheet, pleased see attached file.

Current Ratio = Current Asset / Current Liabilities

Current Ratio = 212,800 / 77,500

Current Ratio = 2.746

Acid-Test Ratio = (Current Assets – Inventories) / Current Liabilities

Acid-Test Ratio = (212,800 – 102,500) / 77,500

Acid-Test Ratio = 1.423

Debt to Asset ratio = (Total Liabilities / Total Assets)*100

Debt to Asset ratio = (205,500 / 432,800)*100

Debt to Asset ratio = 47.48%

ROA = (Net Income / Total Assets)*100

ROA = (26,600 / 432,800)*100

ROA = 6.15%

The Current Ratio is a liquidity measure that shows the ratio between current asset and current liabilities. It tells how many dollars of the current asset are per dollar of current debts, that gives an idea of the company`s ability to perform its debts.

The Quick Ratio is also a liquidity indicator, but using its most liquid assets, to pay its current liabilities at maturity. The inventory, although it is a current asset, is not considered, since it cannot be converted into cash in a very short term.

The difference between the Quick Ratio and the Current Ratio, implies that while both are measures of the company's ability to pay its debts, the quick ratio also tells how much the company depends on its inventory to get that objective.

The Debt to Assets ratio is a financial ratio that shows how much of a company assets is owed to its creditors.

ROA is a financial indicator that gives an idea as to how efficient a company's management is at using its assets to generate earnings, by determining how profitable a company is relative to its total assets.

6 0

3 years ago