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3 years ago

What are examples of the substitution effect and/or real-income effect?

Business

1 answer:

Arlecino [84]3 years ago

8 0

The options available are:

A. After subscription prices in the cable TV market fall, customers also purchase higher-speed Internet service.

B. Julie usually buys generic cereal because it is cheaper. One day she notices one of the brand-name products falls in price, so she decides to buy it.

C. Movie ticket prices plummet to $1, so you cancel your Netflix subscription in favor of attending movies at the theater. In addition, the cheap tickets leave you with extra money for concessions.

D. Kyle notices the cost of premium peanut butter has fallen. He considers this and then purchases less bread.

Answer:

The answers are A, B, and C

Explanation:

The options available are:

Option A. "After subscription prices in the cable TV market fall, customers also purchase higher-speed Internet service" is a perfect example of the real income effect.

Option B. "Julie usually buys generic cereal because it is cheaper. One day she notices one of the brand-name products falls in price, so she decides to buy it," is an example of the substitution effect.

While Option C. "Movie ticket prices plummet to $1, so you cancel your Netflix subscription in favor of attending movies at the theater. In addition, the cheap tickets leave you with extra money for concessions, " is an example of both the substitution and real-income effects

However, option D example "Kyle notices the cost of premium peanut butter has fallen. He considers this and then purchases less bread, " does not fit any of the substitution and real-income effects.

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Answer:

utilitarian

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3 years ago

You should try to get the lowest interest rate possible in which situation

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Answer:

B. you are borrowing money from another person

Explanation:

rest is you giving money to others which if you could youd want higher interest rates for

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3 years ago

Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is: a. not

malfutka [58]

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3 years ago

Outdoor Living is a manufacturer of patio dining sets and outdoor furniture. Typically, customers purchase the company's product

Sonja [21]

Push strategy would work best for Outdoor Living.

Option E

Explanation:

A pushing-marketing strategy, also known as a push advertising approach, is a technique by which a business tries to push its products to customers. In either a push marketing strategy it's meant for customers to continue at the time of purchase by using different active commercialization strategies to "drive" their goods.

It is beneficial for manufacturers who try to build a distribution channel and seek help from retailers in the marketing of goods. It provides access to goods, demand for products and consumer awareness of a commodity.

Demands can be forecast and consistent because the producer will generate and drive consumer products as much or as little.

Cost reductions can be accomplished if the commodity can be manufactured on a cost because of high demand.

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3 years ago

Markson Company had the following results of operations for the past year: Sales (8,000 units at $20) $ 160,000 Variable manufac

AveGali [126]

Answer:

Increase in profit $ 1900

Explanation:

To determine the additional profit from the special order, we would consider only the costs and revenue relevant to the special order decision:

Unit relevant cost = Total variable cost/Units produced

Total variable costs = 86,000 + 12,000 =$98000

Unit relevant cost = 98,000/8,000 = $12.25

Note that fixed costs are irrelevant, whether or not the special order is accepted the fixed manufacturing and administrative expenses would be incurred. Hence, they are excluded from the computation.

Revenue from the special order ( $14× 2,000) = 28,000

Relevant costs of special order ( $12.25 × 2,000) (24,500)

Cost of special tools (1,600)

Increase in profit  1900 

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2 years ago