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Arlecino [84]
3 years ago
10

Mrs. Arnold is spending all her money income by buying bottles ofsoda and bags of pretzels in such amounts that the marginal uti

lityof the last bottle is 60 utils and the marginal utility ofthe last bag is 30 utils. The prices of soda and pretzels are $.60per bottle and $.40 per bag respectively. It can be concludedthat:
A.the two commoditites are substitute goods.
B.Mrs Green should spend more on pretzels and less on soda.
C.Mrs. Green should spend more on soda and less on pretzels.
D.Mrs.Green is buying soda and pretzels in theutility-maximizing amounts.
Business
1 answer:
AleksAgata [21]3 years ago
4 0

Answer:

The answer is C. Mrs. Green should spend more on soda and less on pretzels.

Explanation:

Marginal utility-price ratio = marginal utility of a generic good  / price of a generic good

Soda Marginal utility-price ratio= 60/ 0.60 = 100 utils per dollar

Pretzels Marginal utility-price ratio = 30/ 0.40 = 75 utils per dollar

Mrs. Arnold should choose  soda as it has a higher marginal utility-price ratio than that of  pretzels.

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Answer:

<h3>Cynthia and Dove Corporation</h3>

Any profits generated by Dove Corporation will be taxed to the corporation and also taxed to Cynthia as a shareholder whenever Dove distributes the profits as dividends. Taxing Dove and Cynthia creates a double taxation burden for both Dove and Cynthia. Dove Corporation does not get a tax deduction when it distributes dividends to Cynthia.  Furthermore, Cynthia cannot deduct any corporation loss when incurred.  These are unlike when the business was only a sole proprietorship.

Explanation:

a) Data and Calculations:

Dove Corporation

Balance Sheet

February 1, 2013

Assets

                                                    Basis to Dove     Fair Market Value

Cash                                                 $ 80,000              $ 80,000

Accounts receivable                         0                           240,000

Equipment (cost $180,000;              120,000               320,000

depreciation previously claimed $60,000)

Building (straight-line depreciation) 160,000              400,000

Land                                                    40,000               160,000

Total                                               $400,000          $1,200,000

Liabilities and Stockholders' Equity

Liabilities:

Accounts payable—trade            $ 120,000

Notes payable—bank                    360,000

Stockholders' equity:

Common stock                              720,000

Total                                          $1,200,000

4 0
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8 0
3 years ago
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max2010maxim [7]

Answer:

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Explanation:

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