Answer:
Peter is maximizing his profit and is making an economic profit.
Explanation:
Peter's Pencils is a pencil producing firm in a perfectly competitive firm.
It produces 1,000 pencils an hour.
The total cost of producing 1,000 pencils is $500.
The market price of each pencil is $2.
The marginal cost of producing the last unit of a pencil at this point is $2.
An individual firm in a perfectly competitive market faces a horizontal line demand curve which also represents the average revenue and marginal revenue.
This means that the marginal revenue earned from the 1,000th pencil is $2.
The marginal revenue is equal to marginal cost, this implies that the firm is maximizing profits.
The average total cost of the firm is
= 
= 
= $0.5
The average total cost is $0.5 which is lower than the price. This means that the firm is earning economic profits.
Priya Rahavy, M.D., is a general practitioner whose offices are located in the Lake Forest Professional Building. In the past, Dr. Rahavy has operated her practice with a nurse, a receptionist/secretary, and a part-time bookkeeper. Dr. Rahavy, like many small-town physicians, has billed her patients and their insurance companies from her own office. The part-time bookkeeper, who works 15 hours per week. is employed exclusively for this purpose.
North Avenue Physician's Service Center has offered to take over all of Dr. Rahavy's billings and collections for an annual fee of $24,000. If Dr. Rahavy accepts this offer, she will no longer need the bookkeeper. The bookkeeper's wages and fringe benefits amount to $20 per hour, and the bookkeeper works 50 weeks per year. With all the billings and collections done elsewhere, Dr. Rahavy will have three additional hours available per week to see patients. She sees an average Of four patients per hour at an average fee of $30 per visit. Dr. Rahavy's practice is expanding, and new patients often have to wait several weeks for an appointment. She has resisted expanding her office hours or working more than 50 weeks per year. Finally, if Dr. Rahavy signs on with the center, she will no longer need to rent a records storage facility for $200 per month.
a. Conduct a relevant cost analysis to determine if it is profitable to outsource the bookkeeping.
Answer: c. can be voided based upon fraud in the inducement .
Explanation:
Brad knew exactly what kind of stone it was that Andrew had and yet proceeded to lie about it in order to induce a sale at a much lower price than the actual worth of the jewel .
The contract is therefore voidable because the Brad committed fraud by lying and obtaining the diamond at $50 under false pretenses. Andrew should therefore drag him to the Courts of law to face justice.
Answer:
a. The real GDP increases by $200,000.
a. The real GDP increases by $150,000.
Explanation:
a. What is the eventual effect on real GDP if the government increases its purchases of goods and services by $50,000?
Eventual effect on real GDP = Amount of increase in government spending * (1 /(1 - MPC)) = $50,000 * (1 / (1 – 0.75)) = $200,000
Therefore, the real GDP increases by $200,000.
a. What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $50,000?
Eventual effect on real GDP = (Amount of increase in government transfers * (1 /(1 - MPC))) - Amount of increase in government transfers = ($50,000 * (1 / (1 – 0.75))) - $50,000 = $150,000
Therefore, the real GDP increases by $150,000.
Answer:
Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.
Explanation:
Giving the following information:
Honda Motor Company is considering offering an $1800 rebate on its minivan
New price $30200
Old price $28400.
The marketing group estimates that this rebate will increase sales over the next year from 42000 to 53900 vehicles.
Honda's profit margin with the rebate is $5650 per vehicle.
Normal price:
Income= (5650+1800)*42000= $312,900,000
New price:
Income= 5650* 53900= $304,535,000
Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.
