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3 years ago

9

The owner of a camera store is worried that her new employees may help themselves to items from inventory without paying for the

m. what kind of hazard is described?

2 answers:

sergeinik [125]3 years ago

8 0

This is called a moral hazard I believe

Contact [7]3 years ago

5 0

You're describing a moral hazard

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At the end of the first year, your books showed total revenues of $180,000 and total explicit costs of $90,000 for labor, ink, u

jeka57 [31]

Answer:

$90,000; $90,000

Explanation:

Given that,

At the end of the first year,

Total revenues of the books = $180,000

Total explicit costs = $90,000

Here, we assume that there is no opportunity cost of doing this business, Total implicit costs = $0

Explicit costs refers to the costs that are incurred for running the business such as rent, labor, ink, utilities, taxes, and miscellaneous supplies.

Economic profit is determined by deducting explicit costs and implicit costs from the total revenue. Implicit costs are the opportunity costs.

Total cost of doing business during the first year:

= Explicit costs + Implicit costs

= $90,000 + $0

= $90,000

Economic profit:

= Total revenues - Explicit costs - Implicit costs

= $180,000 - $90,000 - $0

= $90,000

4 0

4 years ago

Nothing nothing nothing

Bingel [31]

Answer:

woah nothing indeed lol

7 0

3 years ago

Read 2 more answers

Mike and Lon came to a party together. A friend offered Mike a ride home. However, there was no room in the car for Lon. What ar

Vikentia [17]

Mike could leave lon behind, walk lon home, offer to pay for a taxi or finally he could stay with him.

3 0

3 years ago

The Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management states that significant eth

posledela

Answer:

a. submitted to the next higher managerial level.

Explanation:

IMA states the following standards of conduct in management accounting: competence, confidentiality, integrity and credibility.... Confidentiality entails accountants to divulge information only at the behest of their supervisor. Integrity forbids managers to engage in unethical behavior. Once an issue can't be resolved the standard procedure is to move a step up the ladder for further assistance.

3 0

3 years ago

Two firms, A and B, each currently emit 100 tons of chemicals into the air. The government has decided to reduce the pollution a

LekaFEV [45]

Answer:

It is likely that <em>C. Firm A will buy all of Firm B's pollution permits. Each one will cost between $100 and $200</em>.

Explanation:

So <em>two firms, A and B, each currently emit 100 tons</em><em> of chemicals into the air, and from now on each one will require </em><em>a pollution permit for each ton</em><em> of pollution emitted into the air</em>.
<em>Each firm gets 40 pollution permits</em><em>, which it can</em><em> either use or sell </em><em>to the other firm</em>. That means that if both firms choose to keep their respective 40 permits, they would still have to reduce the pollution by 60 tons (100 minus 40 is 60).
<em>It costs Firm A $200 for each ton of pollution that it eliminates</em><em> before it is emitted into the air</em>. Because it costs so much to eliminate a ton of pollution, it would make sense for Firm A to get as many pollution permits as possible, <u>as long as they get them for less than $200 each</u>.
It costs Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air. Since here it costs less to eliminate a ton of pollution, it would make sense for Firm B to sell as many pollution permits as possible, <u>as long as they sell for higher than $100</u>.

With that in mind, the outcome that makes the most sense would be <em>Option C. Firm A will buy all of Firm B's pollution permits. Each one will cost between $100 and $200</em>. This way both firms spend the least amount of money while at the same time pleasing the government.

To demonstrate it, let's do some actual calculations for each case.

Case A) Both firms will use their own pollution permits.

In this case, each firm will have to independently reduce their pollutants by 60 tons, as noted before. That represents a high cost, as we will now determine:

For Firm A, the cost would be

$60tons*200\frac{dollars}{ton}=12000dollars$

For Firm B, the cost would be

$60tons*100\frac{dollars}{ton}=6000dollars$

Case B) Firm A will buy some of Firm B's pollution permits. Each one will cost less than $100.

Since Firm B could spend $100 to reduce a ton of pollution, it wouldn't sell its pollution permits for less than $100 each: <em>If Firm B sold its pollution permits for less than $100 each, it would have to reduce even more tons of pollutants (spending $100 for each one), and </em><em>would end up losing money</em>! Let's say it sold 10 pollution permits for $90 each, so it would have to reduce 70 tons of pollutants instead of 60. Its total cost would be:

Cost for Firm B (Case B):

$70tons*100\frac{dollars}{ton}-(10*90dollars)=6100dollars$

Which is higher than the cost calculated for Firm B in Case A, so it's not worth it.

Case D) Firm B will buy all of Firm A's pollution permits. Each one will cost between $100 and $200.

This is a similar case than Case B, in the sense that since it costs Firm A so much to reduce a ton of pollutant ($200 for each one), it wouldn't sell its pollution permits for less than $200 each, <em>or it would end up losing money as well</em>. Let's say Firm A sold all of its 40 pollution permits for $150 each, and so it would have to reduce 100 tons of pollutants instead of 60. Its total cost would be:

Cost for Firm A (Case D):

$100tons*200\frac{dollars}{ton}-(40*150dollars)=14000dollars$

Which is higher than the cost calculated for Firm A in Case A, so it's not worth it.

Finally, Case C) Firm A will buy all of Firm B's pollution permits. Each one will cost between $100 and $200.

As mentioned before, this one makes the most sense because both firms would spend the least amount of money. Let's determine the total costs for each one, knowing that:

Firm A would buy 40 pollutant permits from Firm B, for (let's say) $150 each.
Firm A would still need to reduce 20 tons of pollutants. And
Firm B would have to reduce 100 tons of pollutants, instead of 60.

Cost for Firm A (Case C):

$(20tons*200\frac{dollars}{ton})+(40*150dollars)=10000dollars$

Which is less than the $12000 Cost calculated in Case A.

Cost for Firm B (Case C):

$(100tons*100\frac{dollars}{ton})-(40*150dollars)=4000dollars$

Which is less than the $6000 Cost calculated in Case A.

<em>Since both firms each spend $2000 less in Case C than in case A, it would make sense for them to follow this option</em>.

4 0

3 years ago