Answer: C. inefficiently low; inefficiently high
Explanation:
If the cotton farmers are not made to pay for the damage that their pesticides cost then they will maintain production at a relatively high level because their input costs will be relatively low. As a result of this high level of production, the price of the goods will be relatively low as well. The point at which both market equilibrium quantity and price are at in this scenario are considered inefficient because they are not taking into account, the true cost of production being the effects of the pesticides being used.
However, if they are made to pay for this negative externality that they are the cause of, it will increase their production cost and force them to reduce production to keep these costs low. As they reduce production, the market price will increase as supply is less.
Answer:
C) a reduction in the saving rate will have an ambiguous effect on (C/N)*
Explanation:
The steady state consumption refers to the difference between how capital wears out or depreciates vs total output. In order to keep a steady state consumption, the savings rate (which equals investment) must be enough to replace any worn out or completely depreciated capital.
Since the consumption rate is already higher than the steady state consumption, the effect of a decrease in the savings rate is ambiguous. Every dollar earned by a household is either spent or saved, and in order for savings to decrease, spending must increase.
But in this case, the spending level is already too high. A decrease in savings should increase consumption but the effects of the increase in the capital labor ratio and the per capita consumption are not certain.
Answer:
See attached picture.
Explanation:
See attached picture for explanation.
Answer:
1. $66,000
2. $66,000
Explanation:
The computations are shown below:
1. Before written off:
= Account receivable balance - uncollectible amount
= $70,000 - $4,000
= $66,000
2. After written off:
= Account receivable balance - second year written off amount - uncollectible amount + second year written off amount
= $70,000 - $700 - $4,000 + $700
= $66,000
