Question 28
Competitive markets are characterized by
| a. | the interdependence of firms. | |
| b. | a small number of buyers and sellers. | |
| c. | free entry and exit by firms. | |
| d. | unique products. |
Question 29
A firm that shuts down temporarily has to pay
| a. | both its variable costs and its fixed costs. | |
| b. | its variable costs but not its fixed costs. | |
| c. | its fixed costs but not its variable costs. | |
| d. | neither its variable costs nor its fixed costs. |
Question 30
A profit-maximizing firm will shut down in the short run when
| a. | average revenue is greater than average fixed cost. | |
| b. | price is less than average total cost. | |
| c. | average revenue is greater than marginal cost. | |
| d. | price is less than average variable cost. |
In: Economics
The table below shows data for Flo's Beach Ball Company, a monopolistically competitive firm.
|
Price |
Quantity |
Total Cost |
TR ($) |
MR ($) |
MC ($) |
|
$10 |
6 |
$50 |
-- |
-- |
|
|
$9 |
7 |
$53 |
|||
|
$8 |
8 |
$57 |
|||
|
$7 |
9 |
$62 |
|||
|
$6 |
10 |
$68 |
a. Use the columns above to calculate Total Revenue, Marginal Revenue, and Marginal Cost at each output level. Use negative signs where appropriate.
b. In order to maximize profit, how many beach balls should Flo’s Company produce?
What price should the firm charge? $
c. At the profit-maximizing output level, what is the firm’s total profit? $
d. Given your answer from (b), what will happen to the beach ball industry in the long-run? [Describe the steps that will occur.] What will happen to the profits for Flo’s Company?
In: Economics
1. Goods in transit which are shipped f.o.b. destination should
be
A. included in the inventory of the seller.
B. included in the inventory of the buyer.
C. included in the inventory of the shipping company.
D. none of these answers are correct.
2. What is the primary difference between an ordinary annuity
and an annuity due?
A. Annuity due only relates to present values.
B. The timing of the periodic payment.
C. Ordinary annuity only relates to present values.
D. The interest rate.
3. Which of the following properly describes a
deferral?
A. Cash is paid in the same time period that an expense is incurred.
B. Cash is paid after expense is incurred.
C. Cash is received after revenue is recognized.
D. Cash is received before revenue is recognized.
4. What is the quality of information that is capable of making
a difference in a decision?
A. Materiality
B. Timeliness
C. Faithful representation
D. Relevance
In: Accounting
PRICE | QUANTITY | TOTAL REVENUE (TR) | MARGINAL REVENUE (MR) |
| $10 | 1 | $10 | |
| $9 | 2 | $18 | $8 |
| $8 | 3 | $24 | $6 |
| $7 | 4 | $28 | $4 |
| $6 | 5 | $30 | $2 |
| $5 | 6 | $30 | $0 |
| $4 | 7 | $28 | $-2 |
| $3 | 8 | $24 | $-4 |
$2 $1 | 9 10 | $18 $10 | $-6 $-8 |
1. Now, draw (and label) a demand and MR curve, but add a marginal cost (MC) curve to the picture:
SHOW the profit-maximizing output for the monopolist, Q* (remember -- even though the market structure is different, all profit-maximizers follow the same rule . . . ).
At Q* (the profit-maximizing output), show the PRICE that the monopoly firm will be able to charge its customers for that level of output.
How does the monopolist's price compare to his/her MC?
In: Economics
Your team is managing a fundraiser that will offer chocolate tasting at an event. The chocolate is being donated and thus has no cost to you. Your goal is to maximize the revenue you receive from selling the chocolate.
You know that there are two types of people at your event. Chocolate lovers and chocolate likers. There are 10 chocolate lovers and 20 chocolate likers. However, you cannot tell what type any given person is.
Explain how you will price the chocolate. How much will consumers buy? What will be the total revenue you will collect?
In: Economics
Terry Zelinski, the owner of Tamarisk Mountain Tours, prepared the
following trial balance at March 31, 2021.
|
Cash |
$12,740 |
||
|
Accounts receivable |
2,420 |
||
|
Supplies |
810 |
||
|
Equipment |
7,370 |
||
|
Accounts payable |
$2,200 |
||
|
T. Zelinski, capital |
23,900 |
||
|
T. Zelinski, drawings |
3,630 |
||
|
Service revenue |
6,950 |
||
|
Advertising expense |
3,680 |
||
|
Salaries expense |
380 |
||
|
Totals |
$34,350 |
$29,730 |
A review shows that Terry made the following errors in the
accounting records:
| 1. | A purchase of $600 of supplies on account was recorded as a credit to cash. The debit entry was correct. | |
| 2. | A $300 credit to accounts receivable was posted as $3,000. | |
| 3. | A journal entry to record service revenue of $670 earned on account was not prepared or posted. | |
| 4. | A journal entry to record the payment of $340 for an advertising expense was correctly prepared but the credit to cash was posted as a debit. The debit to advertising expense was properly posted. |
In: Accounting
|
Statement of Profit or Loss for years 2016 to 2019 Year 2019 |
Year 2018 |
Year 2017 |
Year 2016 |
||||
|
$ |
$ |
$ |
$ |
||||
|
Sales revenue |
1,095,910 |
1,060,900 |
1,030,000 |
1,000,000 |
|||
|
Less: Cost of goods sold |
(895,358) |
(866,755) |
(842,540) |
(820,000) |
|||
|
Gross profit |
200,552 |
194,145 |
187,460 |
180,000 |
|||
|
Other operating expenses |
(162,877) |
(161,827) |
(160,900) |
(160,000) |
|||
|
Income before tax |
37,675 |
32,318 |
26,560 |
20,000 |
|||
|
Less: Income tax expense |
(3,768) |
(3,232) |
(2,656) |
(2,000) |
|||
|
Net income |
33,907 |
29,086 |
23,904 |
18,000 |
|||
Required:
In: Accounting
**The demand function for product is p=-8q+800 and the total cost per unit for producing q units is c=67q+80+(1000/q)
-Develop the total revenue, total cost (if not given), and profit functions. Explain these functions in few sentences.
-Compute the point elasticity of demand.
-Find the intervals where the demand is inelastic, elastic, and the price for which the demand is unit elastic.
-Find the quantity that maximizes the total revenue and the corresponding price. Interpret your result.
-Find the quantity that minimizes the average cost function and the corresponding price. Interpret your results.
-What are the quantity and the price that maximize the profit? What is the maximum profit? Interpret your result.
-Discuss the results of 6, 7 and 8.
The supply function is given by, p=8+q, find the price and the quantity at the equilibrium.
-Calculate the consumer and producer surplus
In: Economics
The following table shows the accounts from The Mockers Ltd for the year ended 31 March 2017.
Required:
Other information is: The repayment terms for the mortgage: payments of $1,000 are due on the 1 December each year. The profit for the year was $11,000 after tax.
|
Account |
$ |
|
Accounts payable |
5,750 |
|
Accounts receivable |
8,250 |
|
Accumulated depreciation |
11,250 |
|
Cash |
2,250 |
|
Selling and Administration expense |
18,500 |
|
Depreciation expense |
3,000 |
|
Dividends paid |
5,500 |
|
Equipment |
15,250 |
|
Income tax expense |
3,000 |
|
Interest expense |
1,000 |
|
Inventory |
7,750 |
|
Land |
6,750 |
|
Mortgage |
10,000 |
|
Retained earnings 01/04/16 |
7,750 |
|
Sales revenue |
35,000 |
|
Service revenue |
5,000 |
|
Share capital |
1,500 |
|
Supplies on hand |
1,500 |
|
Supplies expense |
3,500 |
In: Accounting
1.) In the Stackelberg model of oligopoly:
a.) each firm takes the other firm's output as constant in deciding its own output level
b.) the leader firm's output is determined at the point where demand equals price
c.) the leader firm selects its output first, taking the reactions of follower firms into account
d.) each firm decides its output based on the interaction of demand and supply
.
2.) A profit-maximizing monopoly firm that sells output in two distinct markets, A and B, will be in equilibrium when:
a.) the price in each market is equal to its marginal cost of production
b.) the marginal revenue in each market is equal to the price in that particular market
c.) the marginal revenue in each market is equal to its marginal cost of production
d.) the gap between price and marginal cost is maximized in each market
In: Economics