All categories

3 years ago

Assume an economy with two rms. Firm A produces wheat and rm B produces bread. In a given year, rm A produces

Business

1 answer:

andrey2020 [161]3 years ago

8 0

Answer:

(a) Product approach;

The value of Firm A’s production 50,000 *$3=$150,000.

The value of Firm B’s production 50,000 * $2= $100,000.

Firm B pays $60,000 to firm A for 20,000 bushels of wheat, which is an intermediate input. Firm B’s value added is therefore $40,000. GDP is therefore equal to $190,000.

(b) Expenditure approach:

Consumers buy 50,000*$2/loaf and 15,000*$1/loaf.

Consumption spending is therefore equal to $100,000 + $15,000 = $115,000.

Firm A adds 5,000 bushels* $3= $15,000.

Firm A exports 25,000 * $3= $75,000.

Consumers import 15,000 * $1=$15,000.

Net exports are equal to $75,000- $15,000 = $60,000. There is no government spending. GDP is equal to consumption ($115,000) plus 3 investment ($15,000) plus net exports ($60,000). G

DP =$190,000.

Firm A pays $50,000 in wages+ Firm B pays $20,000 in wages= $70,000. Firm A produce $150,000 - $50,000 in wages=. $100,000 profits.

Firm B produces $100,000 -$20,000 in wages- $60,000 to Firm A for wheat=$20,000 profits

Total profit income in the economy equals $100,000+ $20, 000 = $120,000. Total wage income ($70,000) plus profit income ($120,000) equals $190,000. GDP is therefore $190,000.

Explanation:

You might be interested in

The buyer notifies the seller in writing of a termination of the contract under the Loan Objection Deadline. What happens to the

-BARSIC- [3]

Answer:

The earnest money must be returned to the buyer.

Explanation:

The loan objection deadline sets a specific by which the buyer must present a written notification to the seller stating that he/she will not be able to purchase the property due to problems related to obtaining a mortgage loan (or really any other reason, since only the buyer knows about his/her loan status). After this date, if the buyer cannot secure the mortgage loan and finish the purchase, the earnest money will be lost and must be given to the seller.

5 0

4 years ago

A company has a retention rate of 50%, sales of $25,000, beginning equity of $50,000 and profit margins of 10%, an asset turnove

Degger [83]

Answer:

Sustainable Growth Rate: 2.5%

Explanation:

Sustainable growth rate is calculated by multiplying return on equity with retention ratio.

Logic behind above is that whatever portion of net profit is retained by the Company, is used in the Company's operations, which earns certain percentage of equity known as return on equity. By multiplying both return on equity with retention ratio, we assume that the practice will continue for foreseeable future and the Company will continue to grow at the calculated growth rate.

Growth rate = Retention ratio * return on equity

Retention ratio = 50%

Return on equity = Net profit available for distribution / Opening equity

Return on Equity = (25,000 * 10%) / 50,000

Return on Equity = 5%

Growth Rate = 5% * 50%

Growth Rate = 2.5%

5 0

3 years ago

uan Pablo and Zak are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or n

Colt1911 [192]

Answer: Advertise on radio and earn $14,000

Explanation: Dominant strategy may be explained as the tactics or option which works best for a particular firm and seems to give the firm an edge abive other competitors.

Since both are following their dominant strategy, even though advertising on TV seems more lucrative if only one of the advertise, by the time both of them place TV advert, profit falls to $8000. therefore the strategy who gives the highest return when both thread the same advertising path is the radio advert, which gives a return profit of $14,000. Therfore, Uan Pablo should advertise on radio and earn a profit of $14000

6 0

4 years ago

Keisha owns a house worth $275,000 with a mortgage of $195,000. She owns a car worth $12,000 and has $7,500 in car loans. She ha

sladkih [1.3K]

Answer:

$88,700

Explanation:

Given:

Keisha owns a house value $275,000 with a mortgage of $195,000. She owns a car value $12,000 and has $7,500 in car loans.

She has $3,000 in investments, $2,700 in a bank account, and owes $1,500 on a credit card.

Hence, The net worth of Keisha is $88,700

7 0

2 years ago

One argument for the growing income gap between the unskilled and skilled workers in America is that unskilled workers are _____

Lapatulllka [165]

Answer:

The correct answer is b. substitutes, complements.

Explanation:

One argument for the growing income gap between the unskilled and skilled workers in America is that unskilled workers are <u>substitute</u>s with technology and skilled are <u>complements</u> with technology.

3 0

3 years ago