Pizza and sub sandwiches are substitutes. if the price of pizza decreases, this will cause: an increase in the quantity demanded and no change to the quantity supplied
What are substitutes?
Substitutes are goods that are used as alternatives, which means that the fact the decrease in price of pizza means that the quantity demanded would rise as more are demanded as the price reduces and vice versa.
There would be no change in quantity supplied because price decrease is not favorable for the suppliers of pizzas, since they would want to supply more at a higher price instead of supplying more at a lower price
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Answer:
If output doubles when inputs double, the production function will be characterized by a <u>constant returns to scale</u>.
Explanation:
In economics, returns to scale refers to a long run situation that reveals to the proportionate change in output when capital and labor inputs become variable or change.
The three possible types of returns to scale are as follows:
1. Increasing returns to scale: This occurs when the proportionate change in output is greater than the proportionate change in capital and labor inputs.
2. Decreasing returns to scale: This occurs when the proportionate change in output is less than the proportionate change in capital and labor inputs.
3. Constant returns to scale: This occurs when the proportionate change in output is the same as the proportionate change in capital and labor inputs.
Based on the above explanation therefore, if output doubles when inputs double, the production function will be characterized by a <u>constant returns to scale</u>. This is because the the proportionate change (double) in output is the sames as the proportionate change (double) in inputs.
Answer:
1. Gateway Bank
3. White Shark Fishing Company
Explanation:
In the scenario being described the two entities that have an insurable interest in Jake or his property would be Gateway Bank and The White Shark Fishing Company. The Bank has an insurable interest because if something where to happen to Jake they would most likely incur the loss of $800,000 that Jake borrowed, the same goes for the boat since without the boat Jake can't earn income to pay back the loan. The White Shark Fishing Company on the other hand entrusts Jake with their cargo, meaning if anything happens to Jake or the Boat they would lose all of their cargo that Jake is transporting. This would cause them to have to incur those loses.
b. If Jake operated the boat on behalf of the White Shark Fishing Company he would have an insurable interest on the boat since he would lose the income that he makes with the boat. Also, if Jake has a contract and is responsible for the boat he might even have to incur the damages for the boat.
Since he is working as a tax accountant for Starlight Fashions which is a clothing manufacturer, his salary would be classified as period cost..
<h3>What is
period cost?</h3>
In preparation of financial account, a period cost refers to a cost that cannot be capitalized into prepaid expenses, inventory, fixed assets etc
In conclusion, because works as a tax accountant for the clothing manufacturer, his salary would be classified as period cost.
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Solution :
Given :
a). Value of stock earned per share = $5
Percentage of dividends distributed = 16%
Growth of dividend annually = 4%
Calculating the value of the common stock :
= 16% of $5
= 0.16 x 5
= 0.8
k = 0.09
g = 0.04
Therefore, the stock's value is give by,
=$16.64
b). Therefore, the value of the common stock when the growth rate increases is,
= 0.8+20% of 0.8
= 0.96
k = 0.09
g = 0.04
Value of stock
=$19.96
