Answer:
True
Explanation:
Effective from 2015, the Section 106.09 is amended to allow an individual to provide permission to an individual below the age of 18 to act as a cashier in the club or restaurant where alcohol is being sold, only condition applied is:
That the sale of alcohol in such establishment shall not generate revenue more than 50% for total sale revenue including other products.
Here in the given instance,
Gross receipts from sale of alcohol is less than 50% of total sales, and the cashier is 16 years old, thus, it is true.
In their financial statements, Gordon Electronics groups all their current assets together, all their property, plant, and equipment together, all their current liabilities together, all their long-term liabilities together, and all their stockholders’ equity together. This is an example of
A. classified balance sheet.
B. complete income statement.
C. complete balance sheet.
D. classified income statement.
Answer:
A. classified balance sheet.
Explanation:
Balance sheet: The balance sheet comprises of the assets and the liabilities.
The assets are further divided into current assets, tangible assets, and intangible assets whereas the liabilities are also further divided into current liabilities, long term liabilities, and shareholder equity.
It is made on a specific date. The purpose of the balance sheet to analyze the financial position, performance, profitability of the organization.
In the given question, the assets are classified into further parts whereas the liabilities are also classified into further parts. So, the grouping of each item is called a classified balance sheet.
In a contingent contract
A. monitoring is not possible.
B. the principal will be at a disadvantage.
C. the payoffs are dependent upon another variable, such as revenue or profit.
D. the risk neutral party bears the risk.
Answer:
C. the payoffs are dependent upon another variable, such as revenue or profit.
Explanation:
Contingent contracts are one of the types of contracts in which the promisor offers the responsibility only when the distinct conditions are satisfied. It works on the occurrence or non-occurance of the specific event. It relies on the happening of an unpredictable event. The contingent contract becomes void in the case when the happening of the event grows impossible.
What would be your future account value (after-tax and after-inflation) if you invested $125 each month into a growth mutual fund for 20 years? Assume an average annual rate of return of 12.5 percent. Assume a combined federal and state income tax of 24% and an average inflation rate of 3.8% over the 20-year period.
Answer:
future value is $4353.89
Explanation:
given data
invested = $125 each month
time = 20 year
rate of return = 12.5 %
federal and state income tax = 24% = 0.24
inflation rate = 3.8% = 0.038
to find out
future value (after-tax and after-inflation)
solution
first we find here real rate of return by given formula that is
1+ real rate of return = [tex]\frac{1 + nominal return rate}{1+inflation rate}[/tex] ...................1
so here nominal return rate is = 12.5% ( 1 - 24% ) = 9.5% = 0.095
so
1+ real rate of return = [tex]\frac{1 +0.095}{1+0.038}[/tex]
real rate of return = 0.05491
so real rate of return is 5.49%
so
future value formula is express as
future value = [tex]investment * \frac{(1+r)^{n} -1}{r}[/tex] ............2
put here value
future value = [tex]125 * \frac{(1+0.0549)^{20} -1}{0.0549}[/tex]
future value = 4353.89
so future value is $4353.89
f the crowding-out effect is complete, then an increase in government spending of $100 billion will generate how much more real national income? (Assume a marginal propensity to save of .25.)
Answer:
An increase in gevernment spending of $100 billion will generate $400 billion more real national income.
Explanation:
the multiplier = 1/(marginal propensity) = 1/(0.25) = 4
increase in real national income = $100 billion×4
= $400 billion
Therefore, An increase in gevernment spending of $100 billion will generate $400 billion more real national income.
_______________ is a cost-effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. The domestic firm contracts with a foreign company to produce and private-label the goods, because the price is much cheaper than the domestic firm could produce in its' home market.
Franchising
Foreign direct investment
Contract manufacturing
Exporting
Answer:
Contract manufacturing
Explanation:
A contract manufacturer is a company for parts or product lines that contracts with a corporation. It's an subcontracting type.
Businesses can make profit by collaborating with a supplier who already understands the production process, may have specialized in the suitable machinery and operates comparable but non-competing products in their plant in order to benefit from efficiency gains.
Celestin Manufacturing Company incurred $5,000 of depreciation on its manufacturing equipment during its first year of operation. During this year the company made 2,500 units of product and sold 2,000 units of product. Based on this information alone the company would show Multiple Choice
A. $5,000 of depreciation expense on its income statement.
B. $4,000 of cost of goods sold expense on its income statement.
C. $5,000 of inventory on its balance sheet.
Answer:
A. $5,000 of depreciation expense on its income statement.
Explanation:
Assuming the company uses straight line method of depreciation, then cost of depreciation is $5,000 each year.
Now, under the income statement as per GAAP, the cost of goods sold only includes the direct cost associated with manufacturing the product.
It does not included fixed cost like depreciation.
As the depreciation is fixed and does not depend on number of units produced and sold, the depreciation to be charged in income statement = $5,000.
Therefore, the correct option is
A. $5,000 of depreciation expense on its income statement.
Celestin Manufacturing Company would show $5,000 of depreciation expense on its income statement. This is a consequence of the equipment use necessary for business operations.
Explanation:The correct answer would be A. $5,000 of depreciation expense on its income statement. Depreciation is the cost of using an asset over its useful life, and it is usually spread over that life. For a manufacturing company like Celestin, the use of manufacturing equipment is a necessary part of doing business and hence the depreciation is considered an ordinary business expense. The depreciation of the manufacturing equipment should indeed appear as an expense of $5,000 in the company's income statement. It is unrelated to the number of units produced or sold.
The amount of units manufactured or sold will only impact the cost of goods sold (COGS) and inventory, but that depends on several other factors besides depreciation, like material costs and labor costs, which aren't given in the question.
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Websites, such as Craig's List and eBay, function as middlemen by a. increasing the costs associated with matching sellers and buyers. b. decreasing the volume of internet trade. c. increasing the efficiency in matching sellers and buyers. d. increasing the amount of time it takes for buyers to locate sellers.
Answer:
The correct answer is c. increasing the efficiency in matching sellers and buyers.
Explanation:
These websites increase the efficiency of matching sellers and buyers by using algorithms that translate the preferences of the parties concerning their interests. Based on these data, the pages manage to reduce the search time between buyers and sellers.
This service is essential for both parties since they achieve their objectives by having their options pre-selected.
Have a nice day!
As the chief executive officer of Hayden Corp., Kim found an effective way to reward high-performing employees and boost their morale during an economic downturn. Which of the following management functions was Kim engaged in?
a. Planning
b. Organizing
c. Leading
d. Controlling
Answer:
c. Leading
Explanation:
According to my research on the different management functions, I can say that based on the information provided within the question the management function that Kim is engaged in is called Leading. This is the act of a manager influencing or motivating his/her employees so that they perform at optimal capacity in order to achieve the organizational goals. Which is what Kim is doing by looking for a way to reward the best employees.
I hope this answered your question. If you have any more questions feel free to ask away at Brainly.
Kim, as the CEO, was engaged in the management function of leading by finding ways to reward high-performing employees and boost morale.
Explanation:As the chief executive officer of Hayden Corp., Kim's engagement in finding an effective way to reward high-performing employees and boost their morale during an economic downturn aligns with the management function of leading. Leading involves motivating staff, communicating the company's vision, and leading by example to drive the execution of business strategies. In this context, boosting morale and rewarding employees are actions that fall under the purview of leadership.
_____ constitute one of the most important elements of internal control, including separating responsibilities for related operations. A. Control procedures B. Risk assessment activities C. Risk monitoring procedures D. Information and communication activities
Answer:
A. Control procedures
Explanation:
Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability and prevent fraud.
The purpose of the ____ is to define the scope of the CP operations and establish managerial intent with regard to timetables for response to incidents, recovery from disasters, and reestablishment of operations for continuity.
Answer:
The answer is Contingency Planning Policy.
Explanation:
A Contingency Planning Policy is a set of activities that are established to be performed in the case of any interruption or obstruction to the normal operations of a company. It looks to mitigate the impact on any unexpected events by taking action based on the Contingency Plans (CP) laid out by the company.
This policy is covers the communication between the management and plan development departments in regards to roles & responsibilities, allocation of resources, coverage & response times to incidents and the re-establishment of operations. All of this in order to get the company back on track and allowing themselves to reach their organizational goals.
A consumer will often turn to one of her formal or informal _______ groups for advice and guidance on acceptable beliefs, attitudes, and consumer behaviors. This group might be colleagues at work, team members on sports team, or a club in which she is a member.
Answer:
Reference.
Explanation:.
Reference group-people to whom an individual looks as a basis for self appraisal or as a source of personal standards.
In other words, a reference group is any person or group that serves as poitnof comparison (or reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior.
These groups place no restrictions on group size or membership,
From a marketing perspective, reference groups are groups that serve as frames of references for individuals in their purchase or consumption decisions.
Suppose the economy is initially operating well below capacity. In this case, an expansionary macroeconomic policy will result in
A. equal increases in prices and output.
B. a small price increase relative to the output increase.
C. a small output increase relative to the price increase.
D. runaway inflation.
Answer:
The correct answer is option B.
Explanation:
If an economy is working well below capacity this means there is huge amount of unused resources left. Resources or inputs at this point will be available at a relatively lower price. So the firms will be able to expand output at a cheaper rate.
When the demand for inputs increase the input price will not increase much. So, the firms will be able to increase output and the price level will not increase by a great extent.
The opportunity cost of an action is
a. objective and will be the same for all individuals.
b. a measure of the undesirable aspects involved in the action.
c. applicable only to choices involving material goods like commodities.
d. the highest valued alternative forgone as the result of choosing an option.
Answer:
d. the highest valued alternative forgone as the result of choosing an option
Explanation:
An opportunity cost is anything that you sacrificing one thing for the other due to lack of recources and Scarcity of time
For example leisure time and working hours
Outsourcing companies must accept some loss of control when hiring other organizations to perform certain services. A disadvantage related to the loss of control is that it __________.
Answer:
The correct answer is It is not easy way of exiting the outsourcing agreement
Explanation:
Subcontracting is a business process through which a company transfers responsibility for its external tasks to another company specialized in that task.
The subcontracted company is one that by means of an agreement with another company (usually called a contractor or client) carries out the performance of certain activities and services. The way in which this commercial relationship develops is usually defined previously by means of a contract. Sometimes the name is used in English, outsourcing.
It is also common to call this type of subcontracted companies as subcontractors or suppliers. Usually outsourcing serves as a very recurring formula when outsourcing the company's activities.
In the globalized business environment in which we currently live, the outsourcing of productive processes is becoming more frequent by outsourcing activities that companies do not consider key to the level of competition and attending to the main activity in which they work.
In that sense, outsourced companies enjoy certain advantages that help them be useful in the market and meet various needs and services instead of other companies.
The Bigdrill company drills for​ oil, which it sells for​ $200 million to the Bigoil company to be made into gas. The Bigoil​ company's gas is sold for a total of​ $600 million. What is the total contribution to the​ country's GDP from companies Bigdrill and​ Bigoil
Answer:
The total contribution to the​ country's GDP from companies Bigdrill and​ Bigoil is $600 million.
Explanation:
GDP = market value of the goods and services
= $600 million
Therefore, the total contribution to the​ country's GDP from companies Bigdrill and​ Bigoil is $600 million.
Omega Manufacturing employs some of the top professionals in its field, and because of their skills and experience, Omega is highly efficient and outperforms its competitors. Omega Manufacturing has a(n) ________ over its competition.
Answer:
Omega has a competitive advantage over its competition.
Explanation:
Competitive advantage involves factors which put a company in higher position compared to the competitors. It also referred to as competitive edge. There are types of competitive advantage which include cost, differentiation, and people. Omega manufacturing falls under the third category as it has gained a competitive edge by investing in top professionals in order to give a cut-throat competition to the rival companies.
How is earnings per share calculated? A : Divide net revenue by average common shares outstanding. B : Divide net income by average common shares outstanding. C : Subtract operating expenses from gross profit and divide by average common shares outstanding. D : Subtract preferred dividends from net income and divide by average common shares outstanding.
Answer:
D : Subtract preferred dividends from net income and divide by average common shares outstanding.
Explanation:
This ratio is call Earning per share or Net Income per share measures the amount of net income earned per share of common shares outstanding, after profits distribution to preferred shares. Preferred dividends are set-aside for preferred shares, so don’t belong to common shares.
The formula is:
Earnings per Share= ((Net Income - Preferred Dividends) )/(End of Period Common Shares Outstanding)
Earnings per share is calculated by subtracting preferred dividends from net income and dividing by the average common shares outstanding. The correct answer is option D.
The correct method for calculating earnings per share (EPS) is to subtract preferred dividends from net income and divide by the average common shares outstanding.
To provide an example, let's say a company had a net income of $500,000 with $100,000 paid in preferred dividends and an average of 200,000 common shares outstanding. The EPS calculation would be ($500,000 - $100,000) / 200,000, which equals $2.00 per share.
Once the EPS is determined, it can be used to calculate the Price-to-Earnings (P/E) ratio by dividing the current market price per share by the EPS. If the current stock price is $20.00 per share and the EPS is $2.00, the P/E ratio would be 10. This means it would take 10 years of earnings to cover the cost of one share, assuming the earnings remain constant.
In understanding how companies use earnings, it is important to note that they may choose to reinvest profits back into the company or distribute them as dividends to shareholders. Depending on the company's strategy, this can affect both the share price and the amount shareholders earn from dividends, representing the return on investment (ROI).
Identify a difference between goods and services. Select one:
a. Customers directly participate in goods-producing activities, whereas customers do not participate in service-providing activities.
b. Goods can be stored as physical inventory, whereas services cannot be stored as physical inventory.
c. Goods-producing firms rely solely on soft technology, whereas service-providing firms rely solely on hard technology.
d. The demand for goods cannot be predicted, whereas the demand for services can be easily predicted.
Answer:
The correct answer is option b.
Explanation:
Goods are physical or tangible objects but services are intangible and the act of performing work for someone. Goods are produced but services are performed. Transfer of ownership is involved in the case of goods, but this is not the case with services. Goods can be separated from sellers, unlike services which cannot be separated from the provider.
Since goods are physical and tangible they can be produced and stored as inventory. Services are intangible and non-physical so they cannot be stored as inventory.
As compared to U.S banks, foreign banks are less regulated and have fewer restrictions concerning the types of business activities they can pursue. Therefore, foreign banks often engage in numerous aspects of multilayer financial deals. True or False
Answer:
The correct answer is True.
Explanation:
Sometimes more than one institution regulates and supervises the credit market (of banks and other credit institutions). For example, US banking It is regulated by a large number of institutions, because it distinguishes between different types of credit institutions, and because there are regulations both at the state and federal levels. Thus, among others are the Federal Reserve System (Fed), the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision.
In addition, there are also associations of financial regulatory authorities. In the European Union, there are the European Committee of Securities Regulators (CERV), the Committee of European Banking Supervisors (CESB) and the European Committee of Insurance and Pension Funds Supervisors (CESPJ), which are level 3 committees of the European Union in the Lamfalussy process. And, worldwide, there is the International Organization of Securities Commissions (UCITS).
A single public utilities company is responsible for supplying electricity for an entire state. As a result, the utilities company can set the price of electricity.
True / False.
Answer: True
Explanation: Because the company is the sole supplier of electricity in this market, they have all the market power. Market power is the ability the company has to manipulate the market by influencing prices, the level of supply it provides and thus the demand within that market. Companies within markets such as these are known as "price makers", because they are able to change prices of their goods without losing market share.
Because the public utilities company is the sole provider of electricity within this market, they have no pressure or competition from other suppliers within the market. Therefore they have the market power to freely charge higher prices by limiting the supply of electricity. Or charge lower prices by over supplying electricity to consumers.
Indicate whether the following statement(s) applies to microeconomics or macroeconomics:
a. The unemployment rate in the United States was 9.7 percent in March 2010.
b. A U.S. software firm discharged 15 workers last month and transferred the work to India.
c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.
d. U.S. output, adjusted for inflation, decreased by 2.4 percent in 2009.
e. Last week, Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point.
f. The consumer price index rose by 2.7 percent from December 2008 to December 2009.
Answer:
a. The unemployment rate in the United States was 9.7 percent in March 2010 - Macroeconomics
b. A U.S. software firm discharged 15 workers last month and transferred the work to India - Microeconomics
c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise - Microeconomics
d. U.S. output, adjusted for inflation, decreased by 2.4 percent in 2009 - Macroeconomics
e. Last week, Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point - Microeconomics
f. The consumer price index rose by 2.7 percent from December 2008 to December 2009 - Macroeconomics
Sally Mitchell works as a manager at an environmental organization. She is currently working on a global warming project and decides which tasks related to creating awareness about the issue need to be done. In addition, she is also deciding which members of her team will work on engaging with the public and which will work on lobbying with the government. She is also assigning people as team members to ensure that tasks are undertaken on time. Which of the following categories of functions is Mitchell undertaking?
A) planning
B) organizing
C) scrutinizing
D) controlling
E) envisioning
Answer: Organizing
Explanation: Organizing is the process of establishing authority within the organisation so that the operation could be performed efficiently. It can also be defined as the process under which a single work is divided among different individuals.
In the given case, Mitchell is assigning people work as per their qualities and is also establishing authority relationships.
Thus, we can conclude that Sally is performing organizing function.
Which of the following best represents fraud related to financial reporting?
a. The controller of the company decreases warranty expense by $3 million because the company will otherwise miss analysts' expectations this quarter
b. The accounts receivable clerk covers up the theft of cash receipts by writing off older receivables without authorization
c. The in-house attorney receives payments from the French government for negotiating the development of a new plant in Paris
d. The transfer agent issues 40,000 shares of the company's stock to a friend without authorization by the board of directors
Answer:
a. The controller of the company decreases warranty expense by $3 million because the company will otherwise miss analysts' expectations this quarter.
Explanation:
Financial reporting compliance as stated by US GAAP clearly mentions that the accounts prepared shall show true and fair view.
By the term true and fair view it means all the amount provided in the books are accurate, and reliable.
Here, in the given instance the warranty expense is under disclosed, that is the amount shown is less than actual just to meet the analyst's expectations.
Other options like, option b clearly does not represent any unfair amount, it just shows the reason false, for fair balances.
There is no problem in option c.
There is no financial reporting fraud in option d.
Therefore, correct answer is
a. The controller of the company decreases warranty expense by $3 million because the company will otherwise miss analysts' expectations this quarter.
The supply chain function works with marketing to develop planning numbers, such as customer demand and availability of supply, which are needed for effective decision making. This supply chain activity is:
Answer:
Forecasting.
Explanation:
This activity is related to the projecting over time of demand and sales, in order to guarantee availability of inventory. Through this activity, management can have better tools that reflect on a more effective decision making and optimization of resources, information and processes.
Gaggle Inc. decides to wrongly infringe on Chirp Chirp's patent and establish a similar "knock-off" product because Chirp Chirp is just a small start-up company and they lack the money to litigate in court with Gaggle, Inc.
Gaggle, Inc. is:
A. acting ethically...business is war.
B. Unethically exploiting their power and size in the marketplace.
C. Ethically using the civil legal system just like everyone else.
D. Ethically challenging the role of patent rights in society
E. None of the above
Answer:
B. Unethically exploiting their power and size in the marketplace.
Explanation:
Infringing upon a patent in this way breaks the ethical barrier. Gaggle Inc. not on builds the knock-off product but does so because they realize that Chirp Chirp does not have the financial capability to fight them. If both companies were of a similar stature Gaggle Inc. would not have done this as they would be penalized after legal proceedings.
Gaggle Inc. is acting unethically by infringing on Chirp Chirp's patent, as they exploit their market power and disregard legal intellectual property protections.
Gaggle Inc.'s decision to infringe on Chirp Chirp's patent and produce a similar product, despite knowing it is wrong, is unethical. This behavior exploits power and size in the marketplace and undermines the legal protections of intellectual property. A patent is intended to protect inventors and encourage innovation by giving them the exclusive right to market their inventions for a period of time. By infringing on this patent, Gaggle Inc. is not only acting unethically but also potentially engaging in illegal activity, disregarding the economic rights of Chirp Chirp's creators. The argument that business is war does not excuse or ethically justify the infringement of patent rights.
The Ricardian equivalence theorem states that
A. an increase in the government budget deficit has no effect on aggregate demand.
B. tax decreases and government spending increases have equivalent effects on aggregate demand.
C. increase in tax rates will reduce work effort, and thus there will be no effect on output or aggregate demand.
D. direct and indirect crowding out has the same effect on aggregate demand.
Answer: The Ricardian equivalence theorem states that : "A. an increase in the government budget deficit has no effect on aggregate demand."
Explanation: Ricardian Equivalence establishes that when the government increases the expenses financed with debt to try to stimulate the demand, this increase of the expenses does not produce any change in the demand.
This happens because the increases in the public deficit will be higher taxes in the future. Therefore, taxpayers reduce their consumption and increase their savings in order to offset the cost that will be the future tax increase.
The Ricardian equivalence theorem suggests that an increase in the government budget deficit does not affect aggregate demand because private savings offset government savings changes. Thus, no shift in national savings occurs. The correct answer to the question is A. an increase in the government budget deficit has no effect on aggregate demand.
This statement aligns with the Ricardian equivalence theorem, which posits that any increase in government borrowing leads to an equivalent increase in private savings. This offset means that overall national savings remain unchanged, resulting in no effect on aggregate demand or investment. According to this theory, people anticipate future taxes to pay off the government debt and save accordingly, neutralizing the effects of government fiscal policy.
To summarize, Ricardian Equivalence suggests the following:
The timing of taxes is irrelevant.If government spending does not change, then tax cuts or increases have no significant effect on the economy.This means that shifts in government borrowing or saving are perfectly offset by adjustments in private savings, resulting in no change in aggregate demand.
When Frank buys his own house, he would like to have a home theater system and a jacuzzi. He plans to save enough money in the next three years so that he can fulfil his wish. Frank's desire for the home theater and the jacuzzi is an example of a(n) _____________.
a) need
b) market
c) want
d) demand
e) prospect
Answer:
c
Explanation:
he wants all of those things
Legazint, a law firm, organizes its staff into departments based on the type of clients the department deals with. These departments include sole proprietorships, federally incorporated organizations, partnerships, limited liability companies, and corporations. In the context of the approaches to structural design, Legazint most likely follows _____.
Answer:
The correct answer is a customer based division
Explanation:
It is the process of dividing customers into groups based on common characteristics so that companies can market each group effectively and appropriately.
Segmenting customers requires the company to collect specific information - data - from consumers and analyze them to identify patterns that can be used to create segments.
Some of this data can be collected by purchasing information - work, geography, purchased products, for example. Some of these can be gathered by how the consumer entered the system. An online marketer working from a mailing list can segment marketing messages according to an offer that appeals to consumers, for example. Other information, however, including demographic data such as age and marital status, will be necessary to be assertive otherwise.
The basic difference between macroeconomics and microeconomics is:
A.microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
B.microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of firms.
C.microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
D.microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.
Microeconomics focuses on individual consumers and firms' behavior and their decisions in individual markets. Macroeconomics, whereas, focuses on the performance and phenomena of the entire economy such as national income, unemployment rate, and inflation.
Explanation:The basic difference between macroeconomics and microeconomics can be defined by the scope at which they operate. Microeconomics concentrates on the behavior of individual consumers and firms. It analyzes how decisions are made by these entities and how they interact with each other in individual markets.
On the other hand, macroeconomics focuses on the performance of the entire economy. It looks at the broader picture – observing phenomena like national income, unemployment rate, gross domestic product, growth rate, and inflation, among others.
So, the correct answer is C. Microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
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Microeconomics focuses on the decisions of individuals and firms, while macroeconomics considers the performance of the whole economy. Microeconomics studies the behavior of individual units within the economy, while macroeconomics examines the interrelationships of different sectors in the economy on a holistic level.
Explanation:The essential difference between microeconomics and macroeconomics rests on the scale of study. Microeconomics focuses on the behavior of individual consumers and firms, examining how they make decisions and interact in markets. It studies individual units within the overall economy and how they respond to changes in price, demand, and supply. For instance, microeconomics would analyze how a specific company could maximize its production and capacity, thereby influence its price in the market.
On the other hand, macroeconomics observes the economy as a whole, focusing on larger-scale elements such as a country's Gross Domestic Product (GDP), rates of unemployment, national income, rates of inflation, and more. It evaluates how different sectors of the economy relate to each other and how the economy functions as a whole.
Therefore, answer C: 'Microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.' is correct.
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Four students from your economics class are sitting in a local restaurant discussing the market for coffee. Below are quotes from each of the four students. All of the following quotes are logically correct except one. Which quote indicates incorrect economic analysis?A. Nicholas: "If Brazil is hit hard by such a severe freeze that half of its crop is wiped out, then the price of coffee will probably rise."B. Kendra: "If the price of caffeinated soft drinks such as Mountain Dew went down, then consumer demand for coffee would go down since they're substitutes for each other."C. Sergei: "If the demand for coffee were to increase, then I would expect the price to rise, which would then cause the demand to fall back down to its original position."D. Tasha: "If coffee drinkers expect the price of coffee to rise next month, then current demand will go up and lead to a price increase this month."
Answer:
D. Tasha: "If coffee drinkers expect the price of coffee to rise next month, then current demand will go up and lead to a price increase this month."
This is the only one with incorrect economic analysis
Explanation:
A. is correct because a shortage of supply would drop the price as we can see in the Graph 1 with the supply curve.
B. is correct because if the two goods are substitues then a lower price for caffeinated soft drinks like Mountain Dew would cause the consumer demand for coffe to go down because the consumers would prefer the good with lower price, rising the demand for Mountain dow in detriment of coffe.
C. is correct as we can see in the Graph 1, the increse in the demand would generate a higher price but it would make the demand go back to D1
D. is incorrect because if coffee drinkers consume more coffee this monht the price would lower.
Final answer:
The incorrect economic analysis is Sergei's quote regarding self-correcting demand, which is not representative of actual demand behavior. Other students' quotes about supply shocks, substitute goods, and expectations affecting demand and price are logically correct.
Explanation:
The quote that indicates incorrect economic analysis is from Sergei: "If the demand for coffee were to increase, then I would expect the price to rise, which would then cause the demand to fall back down to its original position." This statement does not reflect the typical behavior of demand because demand and price are not directly self-correcting in this manner. Instead, a price increase occurs when there is a shift in the demand curve, but this does not automatically imply that the demand will fall back to its original level solely because of the price rise.
In the context of coffee market analysis, other quotes are logically correct. Nicholas's statement that a severe freeze in Brazil could wipe out half of the coffee crop and lead to a rise in the price is based on the fact that a decrease in supply, with demand holding constant, will raise the price of coffee. Kendra's point that if the price of substitutes like caffeinated soft drinks decreases, it could lead to a decrease in the demand for coffee is correct; substitutes directly affect the demand for a good. Finally, Tasha's comment that expectations of a future price increase can cause the current demand to rise is accurate because consumers may purchase more now to avoid higher prices later, reflecting consumer behavior towards price expectations.