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Roman55 [17]
3 years ago
6

When the price of Nike tennis shoes goes from $100 to $80, the quantity demanded increases from 20 to 30 million. Over this pric

e range, the absolute value of the price elasticity of demand is a. 1. b. 1.80. c. 2.50. d. 0.55. e. 1.25
Business
1 answer:
PtichkaEL [24]3 years ago
4 0

Answer:

c. 2.50.

Explanation:

Elasticity of demand is defined as the degree of responsiveness of quantity demanded to changes in the price of a commodity. It is calculated as percentage change in quantity demanded divided by percentage change in price.

Elasticity is considered elastic if the value is above one, and is means an increase in price results in significant decrease in demand.

When elasticity is less than 1 it is said to be inelastic and increase in price does not result in significant change in demand.

Percentage change in quantity= (30millon- 20 million)/20 million= 0.5

Percentage change in price= (100-80)/100

Percentage change in price= 20/100= 0.2

Elasticity= 0.5/0.2= 2.5

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Which of the following is likely to happen if the Fed buys Treasury securities from banks?a. interest rate rises; investment fal
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Answer: c. interest rate falls; investment rises

Explanation:

The Fed buying treasury securities from banks is an expansionary policy when the government wants to increase the money in circulation and increase economic growth.

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3 years ago
Sandhill Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. D
Artyom0805 [142]

Answer:

Sandhill Warehouse

Journal Entries:

June 1:

Debit Inventory Account $2,575

Credit Accounts Payable (Catlin Publishers)

To record purchase on account, terms 2/10, n/30.

June 3:

Debit Accounts Receivable (Garfunkel Bookstore) $1,300

Credit Sales $1,300

To record sales of books on account.

Debit Cost of Goods Sold $900

Credit Inventory Account $900

To record cost of books sold.

June 6:

Debit Accounts Payable (Catlin Publishers) $75

Credit Inventory Account $75

To record credit for books returned.

June 9:

Debit Accounts Payable (Catlin Publishers) $2,500

Credit Cash Discount $50

Credit Cash Account $2,450

To record payment on account.

June 15:

Debit Cash Account $1,300

Credit Accounts Receivable (Garfunkel Bookstore) $1,300

To record cash receipt on account.

June 17:

Debit Accounts Receivable (Bell Tower) $1,150

Credit Sales Account $1,150

To record books sold on account.

Debit Cost of Goods Sold $750

Credit Inventory Account $750

To record cost of books sold.

June 20:

Debit Inventory Account $900

Credit Accounts Payable (Priceless Book Publishers) $900

To record purchase on account, terms 3/15, n/30.

June 24:

Debit Cash Account $1,127

Debit Cash Discount $23

Credit Accounts Receivable (Bell Tower) $ 1,150

To record cash receipt on account.

June 26:

Debit Accounts Payable (Priceless Book Publishers) $900

Credit Cash Discount $27

Credit Cash Account $873

To record payment on account.

June 28:

Debit Accounts Receivable (General Bookstore) $1,900

Credit Sales $1,900

To record sale of books on account.

Debit Cost of Goods Sold $970

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June 30:

Debit Sales (Returns) $130

Credit Accounts Receivable (General Bookstore) $130

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Debit Inventory Account $90

Credit Cost of Goods Sold $90

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1. Purchase of books on account increases inventory and Accounts Payable.

2. Sale of books on account increases Sales and Accounts Receivable.  It also reduces the Inventory Account and increases the Cost of Sales.

3. Return on Purchases reverses the entries made when goods were purchased.

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5. Bell Tower paid within 10 days and enjoyed the 2% cash discount.

6. Priceless Book Publishers was paid within 15 days, so the 3% cash discount applies.

7. Return on Sales reverses the entries during sales.  |t reduces Sales by a contra account called Sales Returns and the Accounts Receivable.  The inventory account is increased and the Cost of Sales is reduced.

8.  Journal entries record the daily transactions of a business as they occur.  From the general journal, postings are made to the Ledger.

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