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blsea [12.9K]
3 years ago
10

What is the endowment​ effect? A. Wealthier individuals place greater value on a particualr good relative to poorer individuals.

B. The more you have of a​ good, the less value you place on consuming additional units of that same good. C. People place a higher value on a good if they own it than they do if they are considering buying it. D. People place a higher value on goods that they want relative to similar goods that they own.
Business
1 answer:
mr Goodwill [35]3 years ago
4 0

Answer:

The correct answer is letter "C": People place a higher value on a good if they own it than they do if they are considering buying it.

Explanation:

The Endowment Effect reflects a situation in which people value an object more because they own it. The value they would give the object if they did not have it and were going to purchase it would be lower. This scenario takes place when people give a higher value to their objects because of emotional attachment.

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In order to provide more complete information, u.s. gaap allows that any significant noncash investing and financing activities
vampirchik [111]

It is reported as foot notes  in cashflow statement or in the notes of financial statements.

When an income statement is converted to cash flows from operational operations, noncash items like as depreciation and nonoperating profits and losses are not included. Non-cash investing and financing entails making an investment or purchase using financial instruments other than cash.

The Generally Accepted Accounting Principles (GAAP) are a collection of generally observed financial reporting accounting standards and regulations. The four main constraints of GAAP are objectivity, the materiality, the consistency, and the prudence.

Companies are required by both IFRS and US GAAP to declare any substantial non-cash investment and financing operations, either as a footnote at the bottom of the statement of the cash flows or in  notes to the financial statements.

Therefore, the answer is the bottom of the statement of  the cash flows or in the notes to  financial statements.

To know more about U.S Gaap click here:

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6 0
2 years ago
2700 thousand bonds with a face value of $1000 each, are sold at 106. The entry to record the issuance is
IceJOKER [234]

Date, bonds sold at a premium

Dr Cash $28620000000

   Cr Bonds payable $2,700,000,000

   Cr Premium on bonds payable $1,62,000,000

Explanation:

The total face value of the bonds is $1,000 x 2700,000 bonds = $2,700,000,000

since the bonds were sold at 106, their price was =

$2,700,000,000 x 106% = $28620000000

the difference between the face value and the actual market price = $2,862,000,000 - $2,700,000,000 = $1,62,000,000 must be recorded as premium on bonds payable (increases the bonds' carrying value)

<h3>What is the difference between market value and face value?</h3>
  • The market value is the actual price at which the security trades on the open market, as well as the price that fluctuates when the yield reacts to changes in interest rates.
  • The face value is determined by the issuing company. It may be the value at which the firm redeems the shares at some point in the future, but there is no guarantee.

Learn more about date and the interest expense:

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7 0
2 years ago
Santa Fe Company was started on January 1, Year 1, when it acquired $9,000 cash by issuing common stock. During Year 1, the comp
Nitella [24]

Answer:

All of the options are false.

Explanation:

The net income is an element that increases the owners' equity while dividend paid reduces it. Both are elements of the cash flows for operating and financing activities respectively.

Considering the information given;

Acquired $9,000 cash by issuing common stock - This is an inflow of cash and forms the owner's equity balance at the start of the year.

During Year 1, the company earned cash revenues of $4,500, paid cash expenses of $3,750 - These are elements of the income statement and will result in a net income of $500 ($4,500 - $3,750 - $250).

and paid a cash dividend of $250 - This is a reduction in the owner's equity and is a cash outflow.

Now a review of all the options;

a. The 2016 statement of cash flows would show net cash inflow from operating activities of $2,450. - Net  cash flow from operating activities is $750 (($4,500 - $3,750). Hence this is false.

b. The 2016 income statement would show a net income of $1,300. - As shown in the consideration, this is false.

c. The 2016 statement of cash flows would show a net cash flow from financing activities of $9,700.  - Net cash flow from financing is

= $9000 - $250 = $8750

d. The December 31, 2016 balance sheet would show total equity of $15,750 - Total equity

=$9000 + $4,500 - $3,750 - $250 = $9,500

Hence all of the options are false.

7 0
3 years ago
Suppose there are 1000 firms in a market and all are identical. Firm A will hire 20 workers when the wage rate is $10, 25 worker
Triss [41]

Answer:

d. the quantity demanded for the market will increase to less than 30,000 workers.

Explanation:

Missing options:

  • a. the quantity demanded for the market will increase to 30,000 workers.
  • b. the quantity demanded for the market will increase to more than 30,000 workers.
  • c. the quantity demanded for the market will increase, but we can't tell which of the above answers is correct.
  • d. the quantity demanded for the market will increase to less than 30,000 workers.

maximum total demand for labor = 30 (at $8) x 1,000 firms = 30,000 workers, but since the equilibrium rate had been $9 for many years, some workers have already been hired at $9, and it is usually very difficult to lower someone's wage once they have been working. Even thought the quantity demanded will increase, it will probably not be able to reach 30,000 workers.

6 0
3 years ago
If an economy operates at a point within its production possibilities curve, Question 20 options: it lacks the resources necessa
ANEK [815]

Answer:

It is not efficiently using all of its resources.

Explanation:

PPC is the graphical representation of product combinations that an economy can produce, given resources & technology.

  • Points on PPC reflect the best potential production of economy, by best efficient utilisation of available resources & technology.
  • Any point under PPC reflects production under best potential of economy, by inefficient utilisation of resources.
  • Points beyond PPC are unattainable, unless growth in either resources/ technology shifts the PPC curve outwards.

7 0
3 years ago
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