1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lyudmila [28]
3 years ago
6

The substitution effect is the change in the quantity demanded of a good that results fromâ ______________, holding constant the

effect of the price change on consumer purchasing power. A. the tendency of people to be unwilling to sell something they own B. a change in the price of a substitute for the good C. a change in price making the good more or less expensive relative to other goods D. an increase in the usefulness of a product as the number of consumers who use it increases The income effect causes quantity demanded toâ ________ when the price of a normal goodâ decreases, and causes quantity demanded toâ ________ when the price of an inferior good decreases. A. âincrease; decrease B. âdecrease; increase C. âdecrease; decrease D. âincrease; increase
Business
1 answer:
nadezda [96]3 years ago
7 0

1. The substitution effect is the change in the quantity demanded of a good that results from a change in price making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.

2. The income effect causes quantity demanded to increase when the price of a normal good  decreases, and causes quantity demanded to  increase when the price of an inferior good decreases.

Explanation:

The quantity change required this because a rise in the market price of goods leads to a shift in relative prices, which causes consumers to exchange sales with one commodity. This is one of two factors or consequences that underlie the demand rule and the negative curve of the market demand. The second is the impact of profits.

The tax increase is the result of a change in the price of production that impacts the buying power of a specific income level. The adjustment in buying power then results in a necessary supply shift and demand shift. Price changes and revenue are set with the income effect.

You might be interested in
Suppose that $4000 is deposited in an account that earns 5% interest. how much is in the account:
Phantasy [73]
4000*.05=200  so 200 is ur interest       4000+200=$4200
3 0
3 years ago
Floor drains are rapidly becoming extinct in the United States because they: A) Cause slips and trips B) Are too expensive to in
uranmaximum [27]

I believe the answer is D

7 0
3 years ago
Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry. PCC owes Mitsubishi Heavy Industry 500 million ye
Illusion [34]

Answer:

Explanation:

a)

In  the case of forwarding hedge:

The future dollar cost will be = FX receiveable ÷ Foward exchange rate

= 500 million yen ÷ 110 yen/dollar

= $4.55 million

For money market hedge:

Present value of yen payable = 500 \ yen \div (1+ \dfrac{5}{100})

= \dfrac{500 \ yen }{1.06}

= 476.20 million yen

PCC would convert dollars to yens at the spot market rate and borrow yen such that it would get 500 million yen at maturity(i.e after one year)  for Mitsubishi to receive it.

Dollars needed to get these yen = 476.30 yen  ÷ 124 yen/dollar

= $3.84 million

Future Value of these dollars (for comparison with the foward market hedge) = $3.84 × (1 + 0.08)

= $4.15 million

Hence, the money market hedge is better as the dollar cost is lower than the forward market hedge to meet the obligation.

b)

On the maturity date, the spot rate is 110 yen/dollar  

Ad the strike price = 0.0081 /dollar

It is better for the company to go for the strike price due to the fact that it has a lower rate than the spot rate.

Now;

The premium amount = 500000000 yen × 0.014 dollar / yen

= 70000 dollars

However; the Future dollar-cost payable = 500000000 yen × 0.0081 dollar /yen

= 4050000 dollars

By applying option hedge, the total dollar cost required to meet the obligation = (4050000 + 70000) dollars

= 4120000 dollars

c)

The dollar cost needed from the option hedge required to matching the forward hedge is determined by subtracting it from the premium amount:

Thus;

for option hedge, dollar cost needed = (4550000 - 70000) dollars

= 4480000 dollars

The required future spot rate = 500000000/4480000

= 111.61 yen/dollar

As a result, at the future spot rate of 111.61 yen/dollar, PCC will be unconcerned about and indifferent about the option or forward hedge because the future dollar cost of meeting the obligation will be the same.

3 0
2 years ago
A company received a bill for newspaper advertising services, $350. The bill will be paid in 10 days. How would the transaction
creativ13 [48]

Answer:

d. Debit advertising expense $350, credit accounts payable $350

Explanation:

The advertising expense should be recognized when the economic event occurs, in this case recibing the bill, independently of its payment. This is done with a debit because expenses increase by debits. The credit account is a liability: account payable, which represents an increased on liabilities.

6 0
3 years ago
Loan 1:
vampirchik [111]

Answer:

$10,786.88

Explanation:

The total amount paid on loan will be the sum of monthly payments and the deposit paid.

Monthly payments = $888.49 per month

Number of months = 12

Total monthly payments :  $888.49  x  12= $10,661. 88

Upfront fee( deposit) $125

Loan amount

=$10,661. 88 + $125

=$10,786.88

3 0
3 years ago
Other questions:
  • Manny wants to be involved in a business but is not sure which type of business to join or create. He has capital to invest. He
    9·1 answer
  • Gala Company is a manufacturer of laptop computers. Various costs and expenses associated with its operations are as follows.The
    10·1 answer
  • A home mortgage is considered a secured loan because it is backed by __________.
    8·1 answer
  • Franklin Manufacturing provided the following information for the month ended March​ 31: Sales Revenue $ 15 comma 000 Beginning
    13·1 answer
  • Two towns, each with three members, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost
    5·1 answer
  • Flowers, a married taxpayer, purchased an annuity for $64,400 that will pay $700 per month over the life of Flowers and Flowers'
    5·1 answer
  • It is generally recognized that the spending habits of individuals changes over their lives. In general, young adults tend to sp
    13·1 answer
  • At Bargain Electronics, it costs $30 per unit ($20 variable and $10 fixed) to make an MP3 player at full capacity that normally
    5·1 answer
  • Write a letter to invite your friend to your birthday party in french​
    15·2 answers
  • Will give brainliest for all answers
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!