Answer:
d
Explanation:
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality.
Answer:
Explanation:
1. The computation of the balance in retained earnings is shown below:
= Beginning retained earning balance + adjusted net income
where,
Beginning retained earning balance is $780,000
And, the adjusted net income is = Inventory × ( 1 - tax rate)
= $60,000 × (1 - 40%)
= $36,000
Now put these values to the above formula
So, the value would equal to
= $780,000 + $36,000
= $816,000
2. The journal entry is shown below:
Inventory A/c Dr $60,000
To Retained earning A/c $36,000
To Tax payable A/c $24,000
(Being inventory is adjusted and the remaining balance is credited to tax payable account)
Answer:
The answer is A) Macroeconomic policy will be needed to address rising inflation.
Explanation:
Macroeconomics policy addresses key issues in the economy such as the structure, performance, behavior, and decision-making of the whole, or aggregate, economy.
The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles.
In the short term, it focuses on the way the economy performs as a whole and then analyzes how different sectors of the economy relate to one another to understand how the aggregate functions. This includes looking at variables like unemployment Inflation and how it reflect on the Gross Domestic product.
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
With a decrease in input prices, the producers will be willing to produce more items, but we are unsure if consumers will be able to buy more because they drop in income; therefore, we don't know what the price will do.
