Business High School
Answers
Answer 1
Answer:
Decrease consumer surplus
Decrease total welfare
Explanation:
A competitive equilibrium occurs when demand equals supply in a competitive market. A point where demand curve intersects supply curve. If a binding limit is imposed on the number of firms in the market, supply curve will fall. This results in higher equilibrium price and lower equilibrium quantity compared to the efficient outcome without the binding limit. Thus, consumer surplus will decrease (because they pay higher prices for lower quantity) and total welfare will decrease (since consumer surplus decreases).
Consumer surplus is the difference in the amount a consumer is willing to pay and how much he actually pays. Total surplus is the sum of consumer surplus and producer surplus.
Related Questions
On May 2, 1990 SAFE BANK discussed the possibility of loaning Tyler Corp. $500,000. Tyler signed a security agreement and UCC-1 Financing Statement covering its existing equipment. On May 4th, SAFE BANK properly filed the UCC-1 Financing Statement. On May 7, Tyler approached ONE TIME CREDIT about borrowing $600,000 secured by the same equipment. On that same day, ONE TIME CREDIT obtained a signed security agreement, promissory note, and UCC-1 Financing Statement from Tyler Corp, gave Tyler the money and properly filed the UCC-1 Financing Statement. On May 10, Tyler signed a promissory note and received the $500,000 from SAFE BANK. A) If Tyler defaults on both loans, who has a superior interest in the equipment?
B) Would your answer change if ONE TIME CREDIT took possession of the collateral instead of filing a UCC-1 Financing Statement?
Answers
Answer:A. Safe Bank
B. No
Explanation:
Safe bank did the filling before One Time credit, moreover One time is expected to do a check on Tyler credits background before giving out the loan.
The taken over of the collateral will not change the answer, because it's the filling that is more important than taken possession of the collateral.
The ________ appraisal seeks performance feedback from such sources as oneself, bosses, peers, team members, customers, and suppliers and has become very popular in contemporary organizations.
Answers
Answer and Explanation:
The 360 degree appraisal
The ___360 degree_____ appraisal seeks performance feedback from such sources as oneself, bosses, peers, team members, customers, and suppliers and has become very popular in contemporary organizations.
On January 1, 2016, Dermot Company purchased 15% of the voting common stock of Horne Corp. On January 1, 2018, Dermot purchased 28% of Horne's voting common stock. If Dermot achieves significant influence with this new investment, how must Dermot account for the change to the equity method?
Answers
Answer: it must use the equity method for the 2018 financial year but should not make any changes to the 2016 and 2017 financial years.
Explanation:
When Dermot purchased 15% of voting stock in Horne Corp it had just made an investment and had no control over this business or its operations. The normal method of recording an investment (debit. investment and credit. bank) applies. But when he acquired a further 28% in Horne Corp he had a total of 43% (15% + 28%) share in Horne Corp. When a company owns between 20% and 49% of another company, they have significant influence over this company and this company becomes their associate. This means Horne Corp is now Dermot company's associate.
When an associate exists the equity method of recording this investment needs to be used. However the equity method is only applied when the investment becomes an associate and lasts for as long as this investment is an associate. This mean that Dermot will use the normal method of recording an investment for the 2016 and 2017 financial years, and change to the equity method in 2018, when an associate exists.
Suppose that you have just borrowed $200,000 using a 20-year loan with an annual interest rate of 10% arxl monthlypaymentsandmonthlycompounding. Howmuchofyourfirstpaymentwillconsistofinterest?
Answers
Answer: $1666.67
Explanation:
Given from the question
Principal (P) = $200,000
Rate= 10%
Time= 20years
The interest (I) on the first payment is the extra money that is to be paid in addition to the principal borrowed.
The interest for the first year has the formula:
I = (P×R) ÷ 100
I= (200000×10) ÷100
I = $20,000
Therefore the extra amount to be paid on the loan of $200,000 that increases at a rate of 10% for the first year would be $20,000.
The interest compounds monthly therefore, the payment on the first month would be
First Month Interest= 20,000÷12
=$1666.67
Therefore the part of the first payment that would be interest is $1666.67.
For banks and other financial institutions, the discrepancy between the short-term maturities of their deposits and the long-term maturities of their assets is referred to as ____________.
Answers
Answe and Explanation:
For banks and other financial institutions, the discrepancy between the short-term maturities of their deposits and the long-term maturities of their assets is referred to as _a maturity mismatch___________.
Goode Inc.'s stock has a required rate of return of 11.50%, and it sells for $29.00 per share. Goode's dividend is expected to grow at a constant rate of 7.00%. What was the last dividend, D0?
Answers
Answer:
D0 = $1.22
Explanation:
Data provided in the question:
Required rate of return, r = 11.50% = 0.115
Selling price of the stock = $29.00
Expected growth rate = 7.00% = 0.07
Now,
Stock price =
here,
D1 is the current dividend
thus,
$29.00 =
or
D1 = $1.305
also,
D0 =
or
D0 =
or
D0 = 1.219 ≈ $1.22
When Joe didn't have car insurance, he drove very cautiously, because he knew he would have to pay for any damage to his car. Now that he has car insurance, he tends to speed more, because he knows that even if he gets into an accident, his insurance will cover it. The economic problem in this story is known as:
a) Adverse selection
b) The winner's curse
c) Signaling
d) Moral hazard
Answers
Answer:
Option (d) is correct.
Explanation:
Moral hazard refers to a risk which arise from the information provided by the either party in a particular contract. Moral hazard are of many types:
(i) Providing misleading information
(ii) Once the contract is established then either of the party can take higher risk
Moral hazard can be present in a contract between the parties at any point of time. Each party in an agreement have an incentive or we can say that opportunity for gaining from the actions that are not laid out in an agreement.
In our case, the economic problem is moral hazard because after being insured he will be able take higher risk as the probability of loosing money is minimal.
When practical and reasonable, U.S. auditing standards require the confirmation of A. payroll expenses.
B. individual transactions between organizations, such as sales transactions.
C. accounts receivable.
D. fixed asset additions.
Answers
Answer:
c
Explanation:
he comfier the stands on his role
When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70, 000 and a fair value of $100, 000. What amount should have been reported for the land in a consolidated balance sheet at the acquisition date? A) $ 52, 500.
B) $ 70, 000.
C) $ 75, 000.
D) $ 92, 500.
E) $ 100, 000.
Answers
Answer:
E) $ 100, 000.
Explanation:
Under consolidation when the share holding is 50% or more, then it is a parent, subsidiary relationship and in that case equity method is followed.
All the assets of subsidiary are reported in the balance sheet of holding company also. This is to be reported at fair market value.
The minority shareholding is calculated for their share and shown separately.
But all assets are recorded at fair value.
Thus, the correct option shall be:
$100,000 being the fair value of land.
When Dell decided to produce and market an affordable personal computer, it had to consider a number of issues:________what the computer would look like,where and how it would be produced, what options it would include, and so on. Supplying answers to these questions is part of:________
Answers
Answer: Design, planning is the answer.
When Dell decided to produce and market an affordable personal computer, it had to consider a number of issues:___design_____what the computer would look like,where and how it would be produced, what options it would include, and so on.
Supplying answers to these questions is part of:_____planning.
Design has to do with problem detection while planning deals with problem solving.
During 2017, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized a gain of $3,000,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $3,500,000 in 2017. How should these facts be reported in Lopez's income statement for 2017?
Answers
Answer: Income from continuing operations = $0
Income from discontinued operations= -$500 000
Explanation:
Because Lopez Corporation disposed of a significant part of its business, this is known as an unusual item. Unusual items are transactions that have a massive impact on the financials of the business, but that don't happen regularly in the daily operations of said business. An example of this is selling off a massive component of the business. Because this has a large impact on the financials, this figure is allowed to be shown separately in the income statement, regardless of whether it made a profit or a loss. This is known as income/loss from discontinued operations. Continued operations is the income/loss generated from the parts of the business that are still operational, and in a sense shows the actual amount the business made presently.
The payoff matrix shows all of the following EXCEPT a. if one oligopolist chooses a high price and the other doesn't, the high-priced firm makes $8 million.
b. if they both choose a low price, each makes $4 million.
c. if one chooses a low price and the other doesn't, the low priced firm will make $8 million.
d. if both oligopolists choose a high price, each makes $6 million.
Answers
Answer:
Option A is the correct answer
A). if one oligopolist chooses a high price and the other doesn't, the high-priced firm makes $8 million.
Explanation: the pay off matrix shows all the options except that if one oligopolist chooses a high price and the other doesn't, the high-priced firm makes $8 million.
A machine that Ms. Cunningham used in her business was partially destroyed by a fire. The machine had an adjusted basis of $25,000 and a fair market value of $50,000 just before the fire. The fair market value was $20,000 after the fire and before any repairs were made. Ms. Cunningham's insurance company immediately reimbursed her $35,000. What is her gain or loss from the casualty?
Answers
Answer:
her gain from the casualty is $10,000
Explanation:
Data provided in the question:
Adjusted basis of machine just before the fire = $25,000
Fair market value = $50,000
The fair market value after the fire = $20,000
Amount reimbursed by the insurance company = $35,000
Now,
The book value of the machine at the time of fire will be the adjusted basis of machine just before the fire i.e $25,000
Since,
the amount reimbursed by the insurance company i.e $35,000 is greater than the book value of the machine just before the fire, therefore a gain will be recognized.
The amount of gain = amount reimbursed - Adjusted basis
= $35,000 - $25,000
= $10,000
Hence,
her gain from the casualty is $10,000
Worldwide Minerals Inc. wants to expand into the international market. It does not want to spend a very large amount of money for this process. However, Worldwide Minerals wants to maintain some control in the foreign market. Which of the following would be the best entry mode for this firm? a. Joint ventures
b. acquisitions
c. greenfield operations
d. exports
Answers
Answer: Option A
Explanation: In simple words, joint ventures refers to the business arrangement under which two or more independent parties join their operation for the purpose of doing business more effectively.
Worldwide can go for joint venture as it would be less costly then mergers and acquisitions since they have to buy a part of the entity also they can control the entity as per their share in it.
On March 14, Zest Co. accepted a 120-day, 6% note in the amount of $5,000 from AZC Co., a customer. On the due date of the note, AZC dishonors the note and fails to pay. The journal entry that Zest would make to record the failure to pay this note on the due date would include a debit to:
Answers
Answer:
Note = $5,000
Interest rate = 6%
Time period = 120 days
The journal entry is as follows:
On July 12,
Account receivable A/c Dr. $5,100
To Notes receivable $5,000
To Interest revenue $100
(To record note dishonor)
Workings:
Interest revenue = $5,000 × 0.06 × (120÷360)
= $100
On May 1, 2015, Pinkley Company sells office furniture for $300,000 cash. The office furniture originally cost $750,000 when purchased on January 1, 2008. Depreciation is recorded by the straight-line method over 10 years with a salvage value of $75,000. What gain should be recognized on the sale?
Answers
Answer:
$45,000
Explanation:
Data provided in the question:
Selling cost of the furniture on May 1, 2015 = $300,000
Original cost of the machine on January 1, 2008 = $750,000
Depreciable Life of the furniture = 10 years
Salvage value = $75,000
Now,
Annual depreciation =
or
Annual depreciation =
or
Annual depreciation = $67,500 per year
The total duration from the date of purchase to date of selling
= 7 years 4 months
or
= 7 × 12 + 4 months
= 88 months
= years
therefore,
The total accumulated depreciation till the date of sale
= Annual depreciation × Duration
= $67,500 ×
= $495,000
Thus,
The book value on May 1, 2015
= Purchasing cost - Accumulated depreciation
= $750,000 - $495,000
= $255,000
Hence,
The gain recognized = Selling cost - Book value
= $300,000 - $255,000
= $45,000
On October 1, 2019, Illini Company purchased a truck for $42,000. The truck is expected to have a salvage value of $3,000 at the end of its 3-year useful life. If the company uses the straight-line method, the depreciation expense recorded during the year ending December 31, 2019, will be:
Answers
Answer: $13,000
Explanation:
Depreciation expense using the straight line depreciation method :
(Actual cost - Salvage value) / useful life
($42,000 - $3,000) / 3 =$13,000
On the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the XYZ firm confirms its target market (or markets) and decides how its product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year. This process illustrates1) the product launch.2) the company's evalutation of results.3) premarket demonstrations.Incorrect Response4) alpha testing.5) beta testing
Answers
Answer:
1) the product launch
Explanation:
The product launch process is referred to the systematic research and planning by which it could be ensured that costumers will receive a new product positively.
In this case, XYZ firm has been hired to develop market research to confirm the target market of the product and hot it will be positioned in it.
When accounting for a long-term construction contract for which revenue is recognized over time according to the percentage of completion, gross profit is recognized in any year is debited to:
Answers
Answer: Contract sum and credited to income account.
Explanation:
The firm normally receives payment before the commencement of contact. If the contract exceeds an accounting year profit recognize for that year is debited to the contract sum received and credited to income statement for the year.
For each customer, a bakery charges p dollars for the first loaf of bread bought by the customer and charges q dollars for each additional loaf bought by the customer. What is the value of p ? (1) A customer who buys 2 loaves is charged 10 percent less per loaf than a customer who buys a single loaf.
(2) A customer who buys 6 loaves of bread is charged 10 dollars.
Answers
Answer:
p = $2
q = $1.6
Explanation:
If a customer buys 2 loaves he will pay p for the first and q for the second
p + q
if a customer buys a single loaf he pays p
10% less of p is expressed as
p - 0.1p
1. A customer who buys 2 loaves is charged 10% less per loaf (this means average) than a customer who buys a single loaf is expressed as
(p+q)/2 = (p - 0.1p)
(p+q)/2 = 0.9p
(p + q) = 1.8p (cross multiply so that 2*0.9)
q = 1.8p - p
q= 0.8p (equation 1)
2. If a customer buys 6 loaves of bread he will pay p for the first loaf and q for each of the remaining 5 so that
p + 5q = $10 (equation 2)
Now put substitute equation 1 into 2
p + 5(0.8p) = $10
p + 4p = 10 (add)
5p = 10
p = 2 (after dividing both sides by 5)
Now put p=2 into equation 1
q = 0.8(2)
q = 1.6
Thus p is $2