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3 years ago

The reason the substitution effect works to encourage a consumer to buy less of a product when its price increases is:

Business

1 answer:

ikadub [295]3 years ago

8 0

Answer:

The correct answer is the option C: the product is now relatively more expensive than it was before.

Explanation:

To begin with, the <em>substitution effect</em> is the term that, in economics, refers to the situation where a products or services increase or decrease its value in comparison with other and therefore it causes a substitution from the consumer regarding that change in the price.

Secondly, in the case where a product increases its price the substitution effect will cause that the consumer decides to purchase other products due to the fact that the first product is now relatively more expensive than it was before and therefore a substitution of the good takes place.

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Joseph will start school on 9/1/14. He is expected to attend school for four years and will need to pay tuition of $50,000 on Se

My name is Ann [436]

Answer:

e. $153,156

Explanation:

From 9/1/14, he needs $50,000 every year for 4 years to fund the tuition fees. Therefore, present value of the amount needed at 9/1/14 using the Present value of annuity due formula

= 50,000 * {1+ (1/(1.05)^4) } / 0.05 * (1.05)

= $186,162

$186,162 is the amount needed after 4 years. Amount you need to invest today to have this amount in four years = $186,162/(1.05)^4 = $186,162/1.21550625 = $153,156.40

6 0

3 years ago

For an airline, which of the following would not be an operational budget? A cash receipts budget of flying consumers. A budget

katrin [286]

Answer:

A cash receipts budget of flying consumers.

Explanation:

Operational budget is defines as all the profits and expenses a business realises as a result of planning it's operations.

Usually an operational budget is set before activities begin, and is a target to be achieved.

For an airline cash receipts of flying customers is not a revenue realised as a result of planning operations, so this is the correct answer.

However a fuel budget, material budget for parts, and labour budget for flight crew are operational budgets.

4 0

3 years ago

Read 2 more answers

Luis has $170,000 in his retirement account at his present company. Because he is assuming a position with another company, Luis

serious [3.7K]

Answer:

Luis will have $ 1,153,675.657524 in his account at the time of his retirement.

Explanation:

Acording to the data Luis has $170,000 in his retirement account

His current account after 30 years at 4.5% compounded quarterly will be

Current account = $ 170,000(1 + (0.045/4))^(4*30)

Current account = $ 650,838.260724

Acording to the data Luis also plans to put $2000/quarter into the new account until his retirement 30 years from now.

The future value (FV) of the account will be

FV = 2000[(1 + (0.045/4))^(4*30) -1] / (0.045/4) 0.01125

FV = $ 502,837.3968

Therefore, to calculate how much will Luis have in his account at the time of his retirement we have to calculate the following:

Total amount = Current account+FV

Total amount = $ 650,838.260724 + $ 502,837.3968

Total amount = $ 1,153,675.657524

Luis will have $ 1,153,675.657524 in his account at the time of his retirement.

4 0

4 years ago

Your boss, Penny Dirks, has asked you to analyze the airline industry using Porter's Three Generic Strategies. Which of the foll

vodomira [7]

Answer:

The correct answer is A.

Explanation:

Low cost companies, such as Southwest, Horizon, Frontier and JetBlue, are already one of the first options when organizing a trip. Flying is easier and more accessible every day, partly thanks to the low prices that airlines offer us, but also more uncomfortable, so you may ask yourself: what tricks do airlines use to make flying so cheap now?

Point to point routes. Low-cost companies do not offer transshipment services (network), so they save the cost of moving luggage from one plane to another and do not have to worry about the costs of connections between their routes.
Staff costs. When operating point-to-point flights and only short and medium radius, low cost never pay hotels to their crews to spend the night outside the airport where they are destined. Pilots and cabin staff always return to their base. In addition, their salaries are usually lower than those of traditional airline personnel.
Small airports. Operating in small airports and far from the main urban centers allows these airlines to avoid traffic jams, thus saving fuel and time.
Homogeneous fleet. Low cost usually use modern fleets and similar models, allowing them significant savings in maintenance.
Reduced services. These low-cost airlines do not serve meals, cut seat space and eliminate seat allocation, which saves a lot of time, but also money.
Additional income. Most low-cost airlines promote a wide range of gifts and lotteries on board, which gives them significant extra income.
It pays for everything. The reservation of tickets, billing at a counter and the right to carry a suitcase in the hold of the plane is paid with low-cost airlines.
Less expenses at the airport. Many low cost even give up having customer service offices, replacing them with call centers that involve a high cost of calling.
Public incentives. Many public administrations grant great economic aid to these low costs to prevent them from stopping to fly to their airports.
Very high rotation. Companies basically care about two things: get the maximum number of flights and fill the planes to the maximum. A plane is only profitable when it is flying, so more flights, more profitability.

3 0

3 years ago

Assume a state has a criminal statute that punishes "every person who by himself or his employee or agent sells anything at shor

Kitty [74]

<span>Because the statute penalizes the person committing the crime as well as the employer whose employee committed the crime, Chris can be held liable, and the company that we works for (Watkins) can be held vicariously liable under the statute.</span>

5 0

3 years ago