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mars1129 [50]
3 years ago
9

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

Business
1 answer:
Lady_Fox [76]3 years ago
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
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Answer: $38,000

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= 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:

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Explanation:

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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
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Answer:

$995,745

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I/YR = 6

P/YR = 12

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

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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
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Answer:

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