Answer:
Correct option is (b)
Explanation:
Price elasticity of demand is the law that states that proportion of percentage change in demand due to percentage change in price only and not any other factors. Demand is perfectly elastic if quantity demanded changes tremendously with change in price. Demand is inelastic if there is no change in quantity demanded with increase in price.
Here, Get smart university plans to increase tuition fees assuming that there will be no change in demand for the seats offered by the university due to increase in price. So, it assumes that demand is inelastic.
Answer: $225
Explanation:
Deadweight loss is caused by inefficient allocation of the resources or when both the supply and the demand for a product aren't in equilibrium.
The deadweight loss will be calculated as:
= 1/2 base × height
= 1/2 × 15 × 30
= $225
D) All states have a flat state tax.
Answer: historical exchange rate
Explanation:
The temporal method is also referred to as the historical method. Under this method, the currency of a foreign subsidiary is being converted into the currency of the parent company.
It should be noted that under the temporal method, the income statement items which relate to newly recognized assets and liabilities generally are remeasured using the historical exchange rate.
Answer with Explanation:
Requirement 1.
The US import will increase by $1,500,000 due to purchase of indian tea product and this import of tea would result in increase of capital outflow as the Net export particular to importation is negative hence capital outflow is genuine effect.
Requirement 2.
The Net exports can be calculated as under:
Net Exports = Exports - Imports = 0 - $1,500,000 = - $1,500,000
The US Net Exports would decrease by $1,500,000.