I think the answer is b but I am not for sure
Answer:
The answer is: Yes, it's a decreasing cost industry.
Explanation:
Currently the total cost per unit is:
- $130,000 / 125,000 bottles = $1.04 per bottle
If the total costs increase by $5,000 for every 25,000 extra bottles produced, then the total cost per unit is:
- $135,000 / 150,000 bottles = $0.90 per bottle
If the bottle production keeps increasing to 175,000 bottles, the total costs will only increase by $5,000. So the total cost per unit is:
- $140,000 / 175,000 bottles = $0.80 per bottle
So as the production level increases, the cost per unit decreases.
In economics, when finance people talk about MPC, they refer to the Marginal Propensity to Consume. This is simply the ratio of the change in consumption to the change in income. Qualitatively, this measures the ability of a person to save his earnings by minimizing his expenditures.
The equation for MPC is ΔConsumption/ΔIncome. Therefore, MPC is the slope of a graph whose x-axis is income and consumption as its y-axis.
MPC = ($42,500 - $35,000)/($50,000-$40,000)
MPC = 3/4 or 0.75
On the next section, there is no clear answer how an increased spending affects the GDP. Technically, it is the budget deficit that could tell the effect. But still, it would depend on the type of spending and its effect on the long run. Generally, when the government has great spending on projects that would create opportunities for job openings and investments, then the GDP would increase. But if it not, then it would create a large budget deficit. It will be experienced long term through high inflation rates to catch up with the debt.
Answer:
"Assuming the market of soda has a regular downward sloping" demand curve and upward sloping supply curve, the tax will <u>be added to</u> the price paid by buyers and <u>not the price received by</u> the price received by sellers.
Explanation:
When demand is takes a downward slope it simply means the good is not sort after in the open market.When Supply curve takes an upward curve it means their is a great availability of production resources.
Tax incidence goes alongside the above theory,in cases where demand is low ,the tax will will be imposed on the buyer .But in the case where demand is high the tax is usually imposed on the producer.