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3 years ago

How do the Four Key Elements of Economics work in society?

Business

1 answer:

Varvara68 [4.7K]3 years ago

7 0

Four key economic concepts–scarcity, supply and demand, costs and benefits, and incentives

Explanation:

Although possessing a clear knowledge of economic philosophy isn't quite as critical as managing the family budget or studying how to drive a vehicle, the qualities that motivate the analysis of economics affect every moment of our lives. At the most simple point, economics is attempting to understand how and when we make the buying decisions we do.

Four main economic principles – shortage, supply and demand, costs and profits, and opportunities – can help clarify a variety of human decisions.

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The price index was 150 in the first year, 142.5 in the second year, and 138.2 in the third year. The economy experienced:______

Maslowich

Answer:

The correct answer is:

5.0 percent deflation between the first and second years, and 3.0 percent deflation between the second and third years. (a)

Explanation:

to calculate the percentage deflation, we will simply calculate the percentage change in price between the years stated. This is calculated as follows:

% change = $\%\ change = \frac{P_2 - P_1}{P_1} \times 100\\where:\\P_1 = initial\ price\ index\\P_2 = New\ price\ index\\for\ first\ and\ second\ years\\\therefore \%\ change = \frac{142.5 - 150}{150} = \frac{-7.5}{150}= -0.05 \times 100 = -5\%\\$

Note that the negative sign shows a deflation.

if you use the same method for years two and three, you should get -3%, using P₁ as 142.5 and p₂ as 138.2. Hence option 'a' is correct.

7 0

3 years ago

Twelve years ago, the Archer Corporation borrowed $6,200,000. Since then, cumulative inflation has been 80 percent (a compound r

leonid [27]

Answer:

The effective purchasing purchasing power of the initial loan of $6,200,000 when the firm repays is $3,444,444

If the original purchasing power of the $6,200,000 is to be maintained the firm must repay $ 11,160,000

Explanation:

In computing the figures above, I adhered strictly to the hints given in the question the purchasing of the original should be calculated by dividing the original amount by 1 plus cumulative inflation rate of 80% and that the amount should be multiplied by 1 plus cumulative inflation rate to arrive the amount needed as repayment to maintain the purchasing of the initial loan amount.

Find attached for detailed computations

Download xlsx

5 0

3 years ago

Discontinue a Segment Product Tango has revenue of $1,150,000, variable cost of goods sold of $850,000, variable selling expense

Ronch [10]

Answer:

A) Differential analysis is shown below

B) its product should be continue.

Explanation:

As per the data given in the question,

Continue product Discontinue product Differential

Tango(Alt 1) Tango(Alt 2) Effects (Alt 2)

Revenue $1,150,000 $0 -$1,150,000

Costs:

Variable COG Sold -$850,000 $0 $850,000

Variable selling and admin expenses -$275,000 $0 $850,000

Fixed costs -$125,000 $0 $275,000

Profit(Loss) -$100,000 -$125,000 -$25,000

As per analysis discontinuance of product Tango will enhance the amount of loss by $25,000, so it is recommended to continue the operation.

7 0

3 years ago

Company X has beta = 1.6, while Company Y's beta = 0.7. The risk-free rate is 7%, and the required rate of return on an average

Kaylis [27]

Answer:

a. 5.40%

Explanation:

First, I will calculate the new cost of equity for both stock X and Y:

Required rate of return = risk free rate + (beta x market premium)

Re stock X = 8% + (1.6 x 6%) = 8% + 9.6% = 17.6%

Re stock Y = 8% + (0.7 x 6%) = 8% + 4.2% = 12.2%

The difference between the required rate of return = 17.6% - 12.2% = 5.4%

4 0

3 years ago

Allocation of Package Purchase Price Tamarack Company purchased a plant from one of its suppliers. The $1,000,000 purchase price

Novay_Z [31]

Answer:

The total purchase price of the plant allocated to the land, building, and machinery is $140,840, $509,707 and $355,453 respectively

Explanation:

The computation is shown below:

For land

= Total purchase price × appraisal value of land ÷ total appraisal value

= $1,006,000 × $126,000 ÷ $900,000

= $140,840

For building

= Total purchase price × appraisal value of building ÷ total appraisal value

= $1,006,000 × $456,000 ÷ $900,000

= $509,707

For machinery

= Total purchase price × appraisal value of land ÷ total appraisal value

= $1,006,000 × $318,000 ÷ $900,000

= $355,453

where, the total purchase price is

= $1,000,000 + $6,000

= $1,006,000

3 0

3 years ago