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3 years ago

Explain how money encourages specialization, and how specialization improves everyone's standard of living.

1 answer:

6 0

Specialization improves the standard of living of each and every member of a society because if the number of people who specialize in certain areas increase they will be able to innovate new things which will make life easier for all the people.

Explanation:

Money helps in improving specialization because it is with the help of money only we can import and export to other countries.

Lets take an example :Suppose China specializes in making cheap Plastic products it is only possible through the usage of appropriate machinery required for the production of Plastic items.China needs to import the machinery from USA for that it needs money and if china has money it can use the money to buy those machinery .Thus we can say that specialization is linked with money.

Now ,another aspect of the question is that as a country specializes in production of a particular item /product ,its exports will increase .The demand for its product will increase ,so more income is coming from outside the company,thus the standard of living of the people also improves with specialization.

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If a firm's average total cost is less than price where MR = MC,

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Answer:

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Particular Amount($) Amount ($)

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Less: Cost of good sold (595,000)

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Operating expenses 65,000

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Un-collectible account expenses 45,000

Depreciation expenses 3,000

Total operating expenses (244,200)

Operating income 100,800

Non-operating expenses

Interest revenue 6,200

Interest expenses (36,000)

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Total non-operating items (10,800)

Net Income $90,000

Balance Sheet

Assets Amount$

Current Assets

Cash 41,000

Accounts receivable 108,000

Less: Allowance for doubtful (19,000) 89,000

accounts

Merchandise inventory 101,000

Interest receivable 3600

Prepaid rent 38,000

Supplies 6,500

Notes receivable 32,500

Total current assets 311,600

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Less: Accumulated depreciation (66,000) 177,000

Land 95,000

Total property plant and equipment 272,000

Total Assets 583,600

Liabilities and Stockholder Equity

Current liabilities

Account payable 55,000

Unearned revenue 47,000

Warranties payable 6,500

Interest payable 6,000

Salaries payable 68,000

Total current liabilities 182,500

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Notes payable 160,000

Total long-term liabilities 160,000

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Common stock 110,000

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Total stockholders equity 241,100

Total liabilities and stockholders equity $583,600

Workings

Retained earning = Beginning retained earning + Net income - Dividend

= 61,100 + 90,000 - 20,000

= 131,100

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