Answer:
Perfect competition markets are only theoretical, they do not exist in reality, but some markets resemble them very closely, e.g. agricultural commodities:
- thousands of farms that produce corn:
- the product is uniform (it is corn),
- there are several buyers (although not enough as they should be),
- information is not perfect, but it is available,
- and finally, entry barriers exist (farmland is expensive), but a lot of potential investors could overcome them
Generally, the price of agricultural commodities is based on the price set by the Chicago Mercantile Exchange on a daily basis. If one farmer doesn't want to sell their products to Cargill, they can sell them to ADM or some other buyer (even local buyers exist). No producer is large enough to set a price, therefore, they are all price takers. On the other hand, some buyers are large enough to influence the price.
On the other hand, we have any local utilities company that has a monopoly on providing water. If you do not like the utilities company, then unless you have a tanker truck, you are stuck with that company. Monopolies can set the price of their products or services, and that is why most natural monopolies are either government owned or their price is set by the government. As a consumer, your bargaining power against a monopoly is basically nonexistent, maybe if you are part of some type of consumer association you can reach the company, but generally not.
Answer:
C. Net income overstated by $14,200
Explanation:
Effect of errors on 2017 net income = Overstated ending inventory + Understated insurance expense - Understated income on sale of machinery
Effect of errors on 2017 net income = $15,000 + $10,000 - $10,800
Effect of errors on 2017 net income = $14,200 Overstated.
So, the total effect of the errors on 2017 net income is overstated by $14,200
Answer:
The correct word for the blank space is: interpreting.
Explanation:
Philosophy professor John Chaffee in his book "<em>Thinking Critically</em>" (1985) defines concepts as general ideas individuals use to recognize and organize experiences. According to Chaffe we from concepts by generalizing which implies focusing on common properties of a group of objects and by interpreting which implies considering different samples related to the concept to find out if they fulfill its definition.
Chaffee stated that concepts cannot be formed if the individuals do not know how to apply them and examples cannot be gathered if people do not know what those are examples of.
Answer:
a) Loss Aversion
b) Mental Accounting
c) Status Quo Bias
d) Misperceiving opportunity cost
e) Overconfidence
Explanation:
a) In Alexander's case, he is suffering from the Loss Aversion theory that is very prevalent in Economics where some people prefer not losing money as opposed to actually gaining money. Alexander does not want to lose the money he invested and so is holding on hoping to get back his money so he doesn't lose anything.
b) In Jim's case, he practices mental accounting. This is a situation where people group their various money related transactions in different groups in their mind and ascribe them different values. Jim did not attach enough value to the money he found though and so just decided to spend it.
c) Geneva faces Status quo bias which is a situation where one prefers things the way they are. She freezes every time big question is asked of her and just let's things continue the way they are every time. She faces the Status Quo Bias.
d) Tiffany misperceived her Opportunity Cost when she failed to calculate the transport cost associated with the job she took. Had she not done so, she would have factored in the correct Opportunity Cost and seen that it might be better to take the job closer to her.
e) Steve is overconfident in his ability to start a diet. He has been failing at doing so and yet believes he can do so. It is important therefore that he finds something else to spur him ti start the diet because his confidence in doing it himself is clearly a farce and does not match what he actually can do.
True.
A pure market economy requires all property be owned by private individuals and all transactions are free from control or restriction by the government. Since the United States Government does participate in and regulate the economy, the US cannot be "pure market."
