Both individuals and organizations can be consumers.<br> O True<br> O False

A firm incurs $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television

kotykmax [81]

Answer:

D. Economic value created.

Explanation:

The reason is that the economic value created is the difference between the price the customer is willing to pay and the cost that the product actually costs to the firm.

Following is the formula for calculation of economic value created:

Economic Value Created = Value customer willing to pay - Cost of product

Here the television costs $400 to the firm and the customer is willing to pay $600 for the television. So by putting the values we have:

Economic Value Created = $600 - $400 = $200

So the correct option is option D.

5 0

3 years ago

Which fifth factor of production do many economists now include in addition to the four traditional factors of labor, capital,

Tomtit [17]

Answer:

The correct answer is E, Information Resources.

Explanation:

Factors of production include Labor, Capital, Entrepreneurs and physical resources. But in the recent years, information has become the vital resource for organizations. Correct information and knowledge about a specific thing is crucial to the organization. For example if a company wants to introduce its new product and specifies a target audience, if the company doesn't get the accurate information about the needs and demands of that specific target area, other factor of production won't be of any use. So this information resource has become a vital and important part of the factors of production.

7 0

3 years ago

Read 2 more answers

Honduras is a small economy in central america. it keeps a fixed exchange rate with the us. capital is perfectly mobile. you may

rosijanka [135]

Answer:

Given that Honduras is a small economy in Central America, and it keeps a fixed exchange rate with the US, and capital is perfectly mobile, but interest rates are three percent in the US and six percent in Honduras, the explanation of the difference in these interest rates are as follows:

Honduras has a higher interest rate, meaning that its sovereign bonds pay higher values than the American ones, as well as its banks also pay higher interests on their investments compared to American banks.

This is so for a double reason: on the one hand, because the Honduran economy is less reliable than the American economy, which is larger and therefore more solvent and capable of overcoming eventual crises, with which the risk of default is less.

On the other hand, the Honduran economy is more dependent on foreign investment, so it must offer higher interest rates to attract such investments.

5 0

3 years ago

On January 1, 2021, Weaver Corporation purchased a patent for $210,000. The remaining legal life is 20 years, but the company es

Ne4ueva [31]

Answer:

Requirement 1. Journal for purchasing Patent:

Jan 01, 2021 Patent Rights (Debit) 210,000

Cash/Bank (Credit) 210,000

Requirement 2. Journal for amortization expense for the year ended 31 Dec, 2021:

Dec 31, 2021 Amortization expense - Patent 35,000

Accumulated amortization 35,000

Requirement 3. Journal for amortization expense for the year ended 31 Dec, 2022:

Dec 31, 2022 Amortization expense - Patent 35,000

Accumulated amortization 35,000

Requirement 4. Journal for incurring legal fees

Jan 31, 2023 Legal fees 30,000

Cash/Bank 30,000

Requirement 5. Journal for amortization expense for the year ended 31 Dec, 2023:

Dec 31, 2023 Amortization expense - Patent 35,000

Accumulated amortization 35,000

Explanation:

Requirement 1.

Since Weaver corporation purchases a patent, it costs the company cash or bank balance. As the patent is a non-current intangible asset, it is a debit. On the other hand, as cash decreases due to the purchase of patent, the cash is a credit. In this journal, an asset (Non-current asset) increases, and another asset (Current asset) decreases. There will be no effect on the total asset.

Requirement 2, 3 and 5. All the calculations will be the same as it is a straight-line method of amortization. Straight-line depreciation (amortization) is a method of expense on an asset over a long period. The expense is the same over the period as the expense is calculated as the total cost divided by the useful number of years. Again, as the patent is an intangible asset; therefore, the asset has to be amortized instead of depreciated.

The amortization expense of patent is = $210,000/6 = $35,000

Since, the company estimates the patent's useful life will be 6 years. Therefore, the amortization expense will be $35,000 for each year.

Requirement 4: Since legal fees is an expense, the company pays for this due to the occurrence of legal issues. The expense decreases the cash; therefore, it is a credit. On the contrary, the legal fees are a debit as it decreases net income. The legal fees, however, does not affect the amortization expense as it is not adding to the cost of the patent.

7 0

3 years ago

When a service organization provides services that affect the initiation, execution, processing, or reporting of a user company'

chubhunter [2.5K]

Those services are <span>considered to be part of the user company's information system.
The information system obviously provides relevant information about something - given that here services are given which may have an effect on the initiation, execution, processing, or reporting of a user company's transactions, they do belong to the information system of that company.

</span>

8 0

4 years ago

Both individuals and organizations can be consumers. O True O False