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xeze [42]
3 years ago
6

Suppose that a government agency is trying to decide between two pollution reduction policy options. Under the permit option, 10

0 pollution permits would be sold, each allowing emission of one unit of pollution. Firms would be forced to shut down if they produced any units of pollution for which they did not hold a permit. Under the pollution tax option, firms would be taxed $250 for each unit of pollution emitted. The regulated firms all currently pollute and face varying costs of pollution reduction, though all face increasing marginal costs of pollution reduction. Suppose the permit policy is adopted.
Required:
1. A firm will be willing to pay the tax if $250 is less than or equal to __________.Select one:a. the cost of reducing its existing pollution by one unit.b. its marginal revenue.c. its average total cost of production.d. the average cost of eliminating one unit of pollution.
Business
1 answer:
Ksivusya [100]3 years ago
7 0

Answer:

a. the cost of reducing it's existing pollution by one unit.

Explanation:

Marginal cost refers to the addition to total cost when one more unit of output is produced. Marginal cost in the given case would refer to the additional cost incurred for reducing the current pollution level by one unit.

In the given case, a firm is charged $250 for each unit of pollution emitted under the pollution tax option.

It is also stated that all the firms experience increasing marginal costs of pollution reduction.

This means, as additional units of pollution are reduced, the additional costs would go on increasing.

If a firm finds that, reducing 1 unit of pollution from the current level costs it equal or more than $250, it will opt to pay $250 since, for each subsequent unit of pollution reduction, the additional costs would rise.

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A publishing company has estimated the following cost probability distribution for the next year. What is the expected cost to t
Nitella [24]

Answer: $595

Explanation:

First find the probability of a $2,000 loss.

= 1 - other probabilities

= 1 - 0.6 - 0.05 - 0.13

= 0.22

Expected cost to the publishing company is a weighted average of the costs:

= (0 * 0.60) + (500 * 0.05) + (1,000 * 0.13) + (2,000 * 0.22)

= $595

3 0
3 years ago
Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local
NemiM [27]

Answer:

Malco Enterprises

a. The amount of interest expense on Year 1 income statement:

= $1,080

b. The amount of net cash flow from operating activities on the Year 1 statement of cash flows:

= $22,300

c. Total liabilities on the December 31, Year 1 Balance Sheet

= $37,080

d. The amount of retained earnings on the December 31, Year 1 balance sheet is:

= $ 32,420

e. The amount of net cash flow from financing activities on the Year 1 Statement of Cash Flows is:

= $10,000

f. The amount of interest expense on the Year 2 Income Statement is:

= $1,080.

g. The amount of net cash flow from operating activities on the Year 2 Statement of Cash Flows is:

= $24,340

h. The amount of total assets on the December 31, Year Balance Sheet is:

= $79,500.

i. The amount of net cash flow from investing activities on the Year 2 Statement of Cash Flows is:

= $0

j. Retained Earnings on the December 31, Year 2 Balance Sheet:

= $69,540

Explanation:

a) Data and Analysis:

1. Year 1: Cash $10,000 Common stock $10,000

2. July 1, Year 1: Cash $36,000 6% Notes Payable $36,000

3. Year 1: Accounts Receivable $72,500 Revenue $72,500

5. Year 1: Cash $61,300 Accounts Receivable $61,300

7. Year 1: Operating expenses $39,000 Cash $39,000

8. Year 1: Interest expense $1,080 Interest payable $1,080

4. Year 2: Accounts Receivable $85,200 Revenue $85,200

6. Year 2 Cash $71,500 Accounts Receivable $71,500

8. Year 2: Operating expense $45,000 Cash $45,000

9. Year 2, July 1: Notes Payable $36,000 Cash $36,000

10. Year 2, July 1: Interest Expense $1,080 Interest payable $1,080 Cash $2,160

a. The amount of interest expense on Year 1 income statement:

6% of $36,000 * 6/12 = $1,080

b. The amount of net cash flow from operating activities on the Year 1 statement of cash flows:

= $22,300 ($61,300 - $39,000)

c. Total liabilities on the December 31, Year 1 Balance Sheet = $37,080 ($36,000 + $1,080)

d. The amount of retained earnings on the December 31, Year 1 balance sheet is:

= $ 32,420

Revenue $72,500

Operating expenses $39,000

Interest expense $1,080

Net income = $32,420

e. The amount of net cash flow from financing activities on the Year 1 Statement of Cash Flows is:

= $10,000 (Common stock)

f. The amount of interest expense on the Year 2 Income Statement is:

= $1,080.

g. The amount of net cash flow from operating activities on the Year 2 Statement of Cash Flows is:

= $24,340

Accounts Receivable $71,500

Operating expense  $45,000

Interest on notes         $2,160

Net cash flow            $24,340

h. The amount of total assets on the December 31, Year Balance Sheet is:

= $79,500

Cash balance $68,300

Accounts receivable $11,200

Total assets = $79,500

i. The amount of net cash flow from investing activities on the Year 2 Statement of Cash Flows is:

= $0

j. Retained Earnings on the December 31, Year 2 Balance Sheet:

= $69,540

Retained earnings, beginning balance $32,420

Net income                                                39,120

Dividends                                                  (2,000)

Retained earnings, ending balance    $69,540

Revenue $85,200

Operating expenses $45,000

Interest expense $1,080

Net income  $39,120

7 0
3 years ago
Why does economics exist?
aleksley [76]

deals with the production, distribution, and consumption of goods and services.

6 0
3 years ago
Read 2 more answers
Which company has the comparative advantage in producing large tubes of toothpaste? Sparkling Fresh! Bright White Mmmint.
kakasveta [241]

"Bright White" Company has the comparative advantage in producing large tubes of toothpaste.

<h3>What is the term Comparative advantage about?</h3>

Comparative advantage determines the country's specialization by comparing opportunity cost whereas absolute advantage determines country's productivity.

Comparative advantage have some disadvantage also like it can exploit the nation's labor and some economic resources.

Therefore, correct option is B.

Learn more about comparative advantage, refer to the link:

brainly.com/question/15217561

3 0
2 years ago
Hardy Company has current assets of $95,000, current liabilities of $100,000, long-term assets of $180,000 and long-term liabili
icang [17]

Answer:

A. -$5,000 and .95:1

Explanation:

Working capital = Current Assets - Current Liabilities

Provided current assets = $95,000

Current Liabilities = $100,000

Working capital = $95,000 - $100,000 = - $5,000

Current Ratio = \frac{Current \: Assets}{Current\: Liabilities}

Therefore, Current Ratio = \frac{95,000}{100,000} = 0.95:1

Here working capital is negative $5,000

Current Ratio = 0.95 : 1

Final Answer

A. -$5,000 and .95:1

7 0
3 years ago
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