Consider public policy aimed at smoking.
1 answer:
Answer:
1. government shoud increase price by 50%. so it would be $3
2. larger effect 5 years from now
3. this is true due to their limited finance compared to adults
Explanation:
1. prices elasticity = % change in quantity demanded ÷ % change in price
price elasticity = 0.4
% change in dmd = 20%
% change in price = ?
we cross multiply
? = 0.20/0.4
= 0.5
= 50%
so if the government wants to reduce smoking by 20%, it has to increase the price of cigarettes by half of its price= $2 + $1 = $3
2. goods usually have more elastic demand as time goes on. So if cigarette price is permanently raised, it would have a bigger effect five years from now. This is based on the fact that the people may not feel short run effect of the increase as they would in the long run. But gradually given this increase, people may start to gradually reduce their smoking.
3. The effect of the change in price would be more felt on the teenagers. this is due to the fact that they have limited financial strength compared to adults. Also they are new to smoking compared to the adults and are more likely to be less involved in the habit.
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Answer:
The correct answer to the following question will be Option e (0 $ 200,000).
Explanation:
Residual dividend policy should be used for businesses that fund their capital needs by wealth earned at home. Such that, companies can make investments only if all investment requirements are satisfied by something like internal resources instead of moving to something like the marketplace.
Capital Budget = $2,000,000
Capital structure will be:
Debt = 40%
Equity = 60%
Income = $1,000,000
So let us measure the balance of our Expected Debt and Equity first:
Debt =
=
Equity =
=
As we know our income will be $1,000,000.
Then maybe we can have been using our inner income of $1,000,000 to funding everyone's capital requirement of $1,2000,000.
So,
Residual amount =
=
This suggests that our organization has to sell upwards of $200,000 shares of assets and therefore will not be capable to afford to pay some distributions yet. So that option e would be the right answer.