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3 years ago

In words, what does it mean when an economic consultant states:" kevin's income elasticity of red wine is equal to 6?

1 answer:

6 0

When an economist says that "Kevin's income elasticity of red wine is 6" he means that if Kevin's income increases by 10%, the quantity of red wine demanded by Kevin rises by 60%. So, red wine is income elastic. Since the income elasticity is greater than 1, red wine is a luxury good for Kevin.

Income elasticity measures the change in the quantity of goods demanded relative to a change in income.

If an increase in income results in a decrease in the quantity of goods demanded, then that good is an inferior or cheap good. The income elasticity of a cheap good is negative.

If the demand for a good rises with an increase in income, then that good is a normal good. The income elasticity of normal goods is greater than zero.

If an increase in income results in a greater increase in the quantity of goods demanded, then that good is a luxury good. The income elasticity of a luxury good is greater than 1.

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Morgan Company issues 10%, 20-year bonds with a par value of $760,000 that pay interest semiannually. The amount paid to the bon

Drupady [299]

Answer: $38,000

Explanation:

The company is supposed to pay bondholders an Interest of 10% per year according to the terms of the terms of the bond.

= 10% * 760,000

= $76,000

However, payments are to be made semi-annually which will be;

= 76,000 * 1/2

= $38,000

7 0

3 years ago

How would define industry? What is the industry of a store that sells fishing poles

swat32

Answer:

An industry is a group of companies that are related based on their primary business activities. In modern economies, there are dozens of industry classifications. Industry classifications are typically grouped into larger categories called sectors.

fishhook, spinner, cork, gig, fishing pole, bobber, fizgig, landing net, fishing rod, fishgig, bobfloat, harpoon, lance, fishing line, reel, bob, gaff, spear.

Explanation:

Hope it helps you.

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- GumbbleBe3

6 0

2 years ago

The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash equivalents $ 9,219 Accounts r

emmasim [6.3K]

Answer:

The correct answer is 44.73 days or 45 days.

Explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the day's sales uncollected by using following formula:

Day's sales uncollected = No. of days in year ÷ Debtor turnover ratio

Where, Debtor turnover ratio = Sales ÷ Accounts receivable

= $607,500 ÷ $74,422

= 8.16

So, by putting the value, we get

Day's sales uncollected = 365 days ÷ 8.16

= 44.73 days or 45 days.

6 0

3 years ago

You are planning to make monthly deposits of $500 into a retirement account that pays 6 percent interest compounded monthly. If

liberstina [14]

Answer:

$995,745

Explanation:

PV = $0

PMT = $500

I/YR = 6

P/YR = 12

N = 40 x 12 = 480

your retirement account be in 40 years will be $995,745

7 0

3 years ago

Irene has made Sara an offer on the purchase of a capital asset. Irene will pay (1) $200,000 cash or (2) $50,000 cash and a 6% i

AlexFokin [52]

Answer:

Irene would prefer the instalment sale because she can defer the payment of tax until a future date. On the other hand, if she accept the cash sale, she would have to pay the tax immediately. The amount invested in certificate of deposit would be after tax.

Thus the value of an instalment payment would be greater than the value of a cash payment

Explanation:

5 0

3 years ago