Allocator- Price thus serves the function of allocator. First, it allocates goods and services among those who are willing and able to buy them. (As we noted in Chapter 1, the answer to the economic question “For whom to produce?” depends primarily on prices.) Second, price allocates financial resources (sales revenue) among producers according to how well they satisfy customers’ needs. Third, price helps customers to allocate their own financial resources among various want-satisfying products.
Answer:
retained earnings
Explanation:
In simple words, Retained earnings refers to the amount from net profits left available to the company after the owners have taken out dividends. The determination to maintain the profits or disperse them to the owners is typically left mostly to administration of the company.
Although this is done by the declaration of income, the net benefit is still included both in the income statement as well as the cash flow statements. This are not paid to shareholders as dividends but are rather used for new funding back into the company..
Answer:
The correct answer is letter "A": One thing I am afraid to say in this group is...
Explanation:
Managers portraying weak images typically end losing control over their subordinates affecting a company's efficiency and effectiveness. Leaders must always be willing to impose their ideas when convenient for the whole group. They must provide firm, strong orders under those situations for the common benefit of their team. Mentioning employees:
"<em>One thing I am afraid to say in this group is...</em>";
shows the manager is not even sure of what he thinks. It is important to take into consideration the subordinates' points of view but before that, the leader must be sure of what he or she is doing.
Answer:
20,500
Explanation:
The minimum price at split off is the benefit of further processing less the cost of this processing.
product X further process sales value: 35,000
cost of further processing: (15,000)
minimum accepted price at split-off point: 20,500
The reasoning is as follow: the company will sale at leat to break even.
so the product at split off will be sold at cost.
to get 35,500 worth of goods we must add up to 15,000 dollars
so the initial cost is 35,500 - 15,000 = 20,500
Answer:
Market Power
Externality
Explanation:
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
The utility company is a monopoly
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is a utility company
A natural monopoly occurs due to the high start-up costs or a large economies of scale.
Natural monopolies are usually the only company providing a service in a particular region
