Her output per day and costs are seen in the table to the right. \text{Common stock}&&\text{50,000}\\ What will be the percentage change in the index from a 10% increase in the share price of company A? If competitive industry Z is making substantial economic profit, output will: Government ownership of the major industries. What is the main economic difference between a tariff and a quota? Property rights are important because they: B. encourage cooperation by improving the chances of mutually agreeable transactions. 9. Study with Quizlet and memorize flashcards containing terms like A share of common stock represents a(n): A. claim from a lender against a borrower. d. Henderson's fishing boat was purchased on January 1 at a cost of$80,500. 1.What is meant by allocative efficiency? c. Locate inefficiencies in the production process. We can calculate the Ptoday by using equation 8 from the chapter: The equation. The nonprofit label comes from the fact that they are exempt from federal and local taxes in exchange for providing a certain amount of community benefit.. **Required** Increasing a product's use, Finding new customers, Creating a new use situation, Match the example with the correct market 15 terms. D. a liability that people are willing to accept in exchange for goods and services., A barter economy is an economy where An increase in consumer desire for strawberries is most likely to: A. increase the number of strawberry pickers needed by farmers. They can specialize their production. What is the method of reporting for each party if this charity is provided variance powers that enable it to change the beneficiary? The value of company B is $100,000, which we obtain by taking the share price of $1000 and multiplying by 1000 shares outstanding. Explain **two** advantages of microfinance to small businesses in a country such as Peru. $$ 4c. Guide each person's hand to each bit of food and ask him or her to taste it and guess what it is. True or False? price is greater than marginal cost; price is equal to marginal cost. The most broadly based stock index in use is the: When studying world stock indexes, we observe that: When comparing stock indexes around the world we: People differ on the method by which stock should be valued. At the end of the day, does Ike feel emotionally neutral since the dollar value of the gain in his stock portfolio exactly offsets the amount of extra taxes he has to pay? Jacques is planning to set up a $70,000 investment portfolio. Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Alexander Holmes, Barbara Illowsky, Susan Dean, On a separate sheet of paper, match the letter of the term best described by each statement below. \text { Carey } & 12 & 21 \\ Week 1. \hline is essentially: D. "Using the least-cost production techniques.". Voters like the benefits of increased government spending, but do not like having to pay the taxes necessary to fund all the costly government programs that they like. **16. If Bobby sell 20 glasses of lemonade for $0.20 per cup, and his average total cost is $0.17, what are his economic profits for the day? All other things equal, this will lead to a decrease in stock prices. 2. Because China has abundant low-wage workers, it can efficiently produce ______-intensive goods. This situation best identifies the: It promotes specialization by overcoming the problems with barter. They collect any remaining assets once the bondholders (and other lenders) are paid. Study with Quizlet and memorize flashcards containing terms like If you start and manage a landscaping business on your own, you have likely started a:, When you own a sole proprietorship you and the business are considered one, so you have _ liability for financial obligations such as debt, LLCs do have to submit articles of organization and an operating agreement, but do not If the interest rate is 5% (0.05), then equation 7 in the chapter predicts the stock's current price should be: A stock currently does not pay an annual dividend. **6. The chief acquired a sample of the data listed below. The graph includes the firm's marginal cost curve, average total cost curve, and average variable cost curve. If competitive industry Y is incurring substantial losses, output will: C. contract as resources move away from industry Y. The basic difference between these groups is: The dividends that stockholders receive are: You start with a $1000 portfolio; it loses 50% over the next year, the following year it gains 50% in value. A company currently pays an annual dividend of $6.50 per share. katiecavanee1. Study with Quizlet and memorize flashcards containing terms like Which of the following best summarizes why HR managers have to use strategy language when discussing the value of HR programs to senior leadership? You make a $1,000 investment in the stock of ABC Inc. Over the next year the investment decreases by 60%. Following a bumpy launch week that saw frequent server trouble and bloated player queues, Blizzard has announced that over 25 million Overwatch 2 players have logged on in its first 10 days. In a market economy the distribution of output will be determined primarily by: B. the quantities and prices of the resources that households supply. Journalize the adjusting entries needed on December 31 for Henderson Fishing Charters. Similarly, in the case of the Dow Jones Industrial Average, the percentages changes are useful in measuring the performance of the stocks (on average) that make up this index. Consider the graph below showing the market demand and supply for corn.Use the line drawing tool to graph the demand for the corn produced by one corn farmer. Workers, managers, and entrepreneurs could not personally gain by responding to shortages or surpluses or by introducing new and improved products. a. They keep Big Business in check.". \end{array} is essentially: A. Zoning could force businesses producing negative externalities to locate in regions where these costs would not spill over onto third parties, or where such costs would at least be reduced, People enjoy outdoor holiday lighting displays and would be willing to pay to see these displays but can't be made to pay. "Through the profit potential that encourages development of new technology.". Reporting after incorporation. c. HR managers need to show how their HR practices support A negative coefficient indicates an inferior goodincome and quantity demanded move in the opposite direction. While the fixed investment in new oil sands projects is prohibitive, variable costs can be in the low $20 range (say, $23) per barrel." Improves motivation and retention Is the set of integers the union of the set of even integers and the set of odd integers? Which method provides a better measure of a company's economic activity each period? c. Improves customer relations A) omnipotent and symbolic B) omnipotent and reflective C) symbolic and interactive D) reflective and interactive, 23) The current dominant assumption in management theory suggests that The risk premium is the compensation the investor requires due to the fact that the future selling price of the stock is uncertain. 1. Study said figure. What is rent seeking and how does it differ from the kinds of profit maximization and profit seeking that we discussed in previous chapters? Why does a local McDonald's face a downward-sloping demand curve for its Quarter Pounder? Money Capital Labor Land and more. **Population. Discuss how the current stockholders of XYZ Inc. will feel about this plan. Corporations can only deduct net operating losses going back two years and forward 20 years. rnremley Plus. Chartists look for patterns in the price movements of a stock. They can acquire more goods and services. How do monopolistically competitive market structures affect consumers? Why does a local McDonald's face a downward-sloping demand curve for its Quarter Pounder? Produce more than Canadian customers will buy, and sell the surplus to the United States. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. Shifting work that was previously done by American workers to workers abroad is called what? Yes, because you are covering your variable costs. The economy of the United States can best be described as pure capitalism. Study with Quizlet and memorize flashcards containing terms like The ______ cost of any resource used to produce a good is the value or worth the resource would have in its best alternative use., ________ costs are the monetary payments a firm makes to purchase resources from others., Your company's total sales revenue for the month is $150,000; the costs to Field tests revealed that Winchester bullets fired from the pistol had a mean velocity (at 15 feet) of 936 feet per second and a standard deviation of 10 feet per second. Peel and cut the food into pieces. At the end of two years your portfolio is worth: You have a portfolio valued at $1000. Why are stock market bubbles costly for the economy? Contrast how a market system and a command economy try to cope with economic scarcity. How much resources are available in the economy and where they are located B. Identify what activities drive overhead costs. The economy would probably be less efficient. When the bubble bursts these individuals are left trying to adjust, which can be not only inefficient but traumatic. charge a price greater than marginal cost and do not produce at minimum average total cost. The article noted that: "Chipotle has always sought to stand out with fresher offerings than its competitors, but many fast food chains in recent years have tried to make their menus simpler and healthier." What price would an individual be willing to pay today for a stock he/she expects can be sold for $200 one year from now, if the individual has a discount rate of 6% (.06) and the stock pays an annual dividend of $7.50? \ Mutual funds are designed to provide more diversification than what most individual investors could hope to achieve on their own. As one drinks beer, one also smokes marijuana. Hardly. Now, we can compute the current price of the stock: Considering the return an investor requires from a stock, what are the two components that make up that return? Other Quizlet sets. the number of firms in the market for watches would remain the same, the price would remain the same, and each individual firm in the industry would continue to produce the same amount of watches. True or False? In 2001 an outbreak of foot-and-mouth disease in Europe led to the burning of millions of cattle carcasses. ** Installed 60 standard alarm systems for$33,000. based on the production data, which of the following statements about the marginal product of the fifth worker is true, As output of a firm increases, the difference Exchange by barter requires a coincidence of wants. Many industries can claim they make contributions to national security and deserve protection. Study with Quizlet and memorize flashcards containing terms like Apply revenue recognition principles to various types of transactions., Identify issues with revenue recognition at point of sale, including sales with buyback agreements, sales when right of return exists, and trade loading (or channel stuffing)., Identify instances where revenue is recognized before delivery Study with Quizlet and memorize flashcards containing terms like What is an opportunity cost? The exchange ratio at which two countries trade their products is called the ______ of trade. The market price of children's mittens is $6.00 per pair. Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. "Goods and services that are profitable.". ** ( c ) If the festival organizers wanted to set an economically efficient price of $\$ 1.25$ per soda, how would this change the results from part (b)? Interpret these coefficients. Which of the following items can be classified as (d) accrued expense. changing the price affects the quantity sold because firms sell differentiated products. \text { Whistler } & 11 & 19 \\ First, we need to compute the growth rate of dividends, g. This is equal to 5% = ($21 - $20)/$20. ** The population of Mexico was $116$ million in $2013$ and was growing at a rate of $1.07\%$ per year, compounded continuously. No, they will experience neither economic profits nor economic losses in the long run, unless they continually differentiate their products. D. a liability that people are willing to accept in exchange for goods and services., A barter economy is an economy where On the other hand, if the company's estimate or forecast is wrong and the expansion does not prove profitable, the stockholders will see a lower return than they would have without the expansion. Firms are motivated to minimize production costs because: C. competitive pressures in the market will drive out higher-cost producers. Suppose an assistant professor of economics is earning a salary of $70,000 per year. Rent-seeking is an appeal to the government for special benefits at taxpayers or someone else's expense. economic profits will be zero. Explain why the willingness to purchase stocks is influenced heavily by shareholders' legal rights with respect to control of the corporation. B. Neoclassical Participants act in their own self interest and seek to maximize satisfaction or profit through their own decisions regarding consumption or production. Economic profits in an industry suggest the industry: Government should not interfere with the operation of the economy. Fees earned but not yet received. josh_parker_wang. 8. Are there any costs to heuristics being "fast and frugal"? Tariffs replaced quotas on apparel and textiles. The price that equates the quantities supplied and demanded globally through international trade. The Nasdaq is a value-weighted index, where the DJIA is a price-weighted index. Bobby decides to sell lemonade on a hot summer day. In the previous example we plotted the USD to 1 EUR for a 6-month time period. (1) Affordability, (2) liquidity, (3) diversification, (4) management, and (5) costs are the five issues that need to be considered, and mutual funds address these in one way or another. ** Purchased with cash another 25 alarm systems on August 1 for resale at a cost of$260 each. a. Which of the following is not a feature of common stock? They just want really high-quality food.". Discuss the shape of the long-run supply curve in a perfectly competitive market. 1.An article in the Wall Street Journal described the marketing philosophy of Whole Foods Market, a supermarket chain that sells many food products that have no preservatives or artificial sweeteners: 1. Q profit max 3. \hline \text { Holgate } & 17 & 7 \\ On the other hand, if the company is hugely successful, once the other liabilities are paid all, of the residuals belong to the common stockholders. b. Henderson purchased a nine-month boat insurance policy on November 1 for$8,100. Why isn't the actual level of an index, for example the Dow Jones Industrial Average, very useful on its own? Because those who put up lights are unable to charge others to view them, they don't put up as many lights as people would like. Supplies on hand. What type of graphic shows the amounts of two products a nation can obtain by specializing in one product and trading for the other? How many peppers should Miguel produce each day to maximize his profits? \hline \text { Oxford } & 15 & 17 \\ a. earn economic losses. 1. This separation of the two markets could lead to a misallocation of resources. 86 terms. The services are billed to the customers each month. a. This is an example of a, Jennifer buys a piece of costume jewelry for $33, for which she was willing to pay $42. Which of the following is an expression of profit for a perfectly competitive firm? 12 terms. Study with Quizlet and memorize flashcards containing terms like Determine whether each of the following examples would be included in Gross Domestic Product (GDP). Profits 4. \text{Merchandise inventory (9 @ \$240)}&&\text{2,160}\\ Recall that stockholders are residual claimants. What will happen to the quantity of McDonald's cheeseburgers demanded? C. an asset that people are willing to accept in exchange for goods and services. It expects the growth rate of the dividend will be 2.5% (0.025) annually. 4. reallocate resources from less desired to more desired uses. "Goods and services that are profitable.". Study with Quizlet and memorize flashcards containing terms like How do nations benefit from international trade? Study with Quizlet and memorize flashcards containing terms like A multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and managing value-added activities in other countries T/F, The term "emerging markets" refers to all markets other than the developed markets T/F, GDP is the sum of value added by resident firms, Revenue recognition upon completion On a long-term construction project, the amount in the construction in progress account represents the costs of construction plus the gross profit recognized to date, and the billings on construction represents D. buyers determine what will be produced based on their "dollar votes" for the goods and services offered by sellers. The advent of DVDs threatens to eventually demolish the market for videocassettes. Previously, the government did not permit foreigners to purchase domestic stock. The "coincidence of wants" problem associated with barter refers to the fact that: A. for exchange to occur each seller must have a product that some buyer wants. In the evening, his accountant calls to tell him that he owes an extra $1,000 in taxes. Money Capital Labor Land and more. 12 terms. a. earn economic losses. ** The American Rifleman (June 1993) reported on the velocity of ammunition fired from the FEG P9R pistol, a $9 \mathrm{~mm}$ gun manufactured in Hungary. What are the likely reason(s) that the market for electricity is not perfectly competitive? **10. The fact that many corporations use debt financing as well as equity financing creates all of the following except: Without the stockholders' limited liability, the risk from the use of leverage would: Consider the effect of business cycles on bondholders versus stockholders. What can be important and interesting is to compare percentage changes in the various indexes and to see how they correlate or move together. This clearly makes stock ownership more attractive. Why are they called inputs? Study with Quizlet and memorize flashcards containing terms like Which of the following are functions of exports assistance centers (EACs), Darla's bicycle ship in the United States is experiencing a slowdown in its growth. - average loan amount: $\$ 2800$ Those companies that are positively affected by the bubble and see their stock prices increase will find it relatively less expensive to raise funds and consequently may over-invest. B. share in the company's debts. Firms in a perfectly competitive market earn accounting profit, but no economic profit. How does free trade tend to benefit society? What are the larger implications for economic efficiency? At the market price of $4.00 per apple pie, how many apple pies should Baker Street make? Xavier is breaking even and should continue to produce to continue breaking even in the long run. Study with Quizlet and memorize flashcards containing terms like Economic growth, Economic growth is normally calculated as a percentage rate of growth per quarter or per, Real GDP per capita means GDP ____________ a. per country b. in real terms c. divided by capital stock d. per person and more. Explain the additional journal entries required by process costing systems that are not needed in job order costing systems. Compute the required stock return and current price of this stock, using the dividend-discount model. It is difficult to enter or exit the industry as a supplier. \text{Accounts receivable}&&\text{20,500}\\ Korda is very skeptical about how useful the advice in these books is: 1.How does the entry of new coffeehouses affect the profits of existing coffeehouses? What were some of the effects of the trade policy changes under GATT? Michael Korda for many years was editor-in-chief at the Simon & Schuster book publishing company. (Enter a loss as a negative number. easy, so firms can expect to earn zero economic profit in the long run. When Judy went to the grocery store yesterday, she bought three pounds of potatoes. What are economic resources? D) the probability of a loss occurring., Objective risk is defined as A) the probability of loss. What percentage increase is needed in the fund to restore your portfolio to the level it was one year ago? Which problems did critics fear that NAFTA would cause? Farmer Jones grows apples. They can specialize their production. Economic profits attract firms to enter an industry, and economic losses cause firms to exit an industry. The figure to the right represents the cost structure for a perfectly competitive wheat farmer with her average total cost (ATC) curve and marginal cost (MC) curve. D. a liability that people are willing to accept in exchange for goods and services., A barter economy is an economy where Study with Quizlet and memorize flashcards containing terms like , Entry, Exit and more. differentiate its product and produce at lower average cost than competitors. They have not had time to become efficient enough to compete against mature foreign companies. $22,000 of the sales were on account and$11,000 were cash sales. These operations would not be profitable to build from scratch but were profitable to operate given that they were already built because, as the columnist said: "The key is the distinction between fixed and variable costs. Study with Quizlet and memorize flashcards containing terms like Accumulated Depreciation, Acreage Reporting Date, Actual Cash Value (ACV) and more. The company received its electric bill on December 20 for $150 but will not pay it until January 5. When firms maximize their profits, society's output will also be maximized. Study with Quizlet and memorize flashcards containing terms like The valuation of an MNC should decline when an event causes the expected cash flows from foreign subsidiaries to ____ and when the foreign currencies denominating these cash flows are expected to ____., The agency costs of an MNC are likely to be higher if it, The Sarbanes-Oxley Act caused corporate "Under central planning, some group has to decide how to get the necessary inputs produced in the right amounts and delivered to the right places at the right time. c. The U.S. Air Force purchases two new fighter jets We should expect the current price of stocks to: The impact from rapid dividend growth on a stock's current price will be. **1. If the interest (discount) rate is 5% (0.05) what does the dividend-discount model predict the current price of the stock should be? 4d. What is the main effect of increasing opportunity costs? firms would exit the market for watches, the price would rise, and each remaining firm in the industry would produce more watches. Six months later, a large chain opens a copy store two blocks away from yours. An investor expects this policy to remain in force. One way to deal with this misallocation is to allow companies the option of issuing the number of shares that will allow them to equate the prices in both markets. Would you be likely to find a wide range of prices for cucumbers? \text { City } & \text { Police } & \text { Number of Crimes } \\ The simple circular flow model shows that: C. households are on the selling side of the resource market and on the buying side of the product market. We expect that business cycles will affect: In the event of bankruptcy, stockholders: All other things equal, a decrease in the equity risk premium leads to a(n): The basic dividend-discount model is a bit of an oversimplification for valuing stocks because it: The required stock return an investor seeks can best be represented by which of the following? Study with Quizlet and memorize flashcards containing terms like Scarcity exists when there are _______ resources available to satisfy all the competing uses a. too many b. just enough c. not enough d. no, mod 1, Which of the following is not one of the categories of economic resources? From society's point of view the economic function of profits and losses is to: 1. promote the equal distribution of real assets and wealth. This is determined by taking the current stock prices and dividing by two, similar to the construction of the DJIA. 25 terms. b. HR managers are not accountable for planning. Suppose Farmer Smith grows apples. Study with Quizlet and memorize flashcards containing terms like How do nations benefit from international trade? Is the Efficient Markets Hypothesis (EMH) responsible for the financial crisis of 2007-2009? b. Ford Motor Company buys four tires to put on a new Ford Mustang. What is the key determinant in whether a country can gain from specialization in international trade? By contrast, in the DJIA the higher priced stocks carry more weight because it is a price-weighted average. Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. An article on marketwatch.com quoted the CEO as saying: "[W]e see our recent upturn in trafficas validation of our decision to refocus on everyday valueand improved speed-to-table.". When his professor called on him in class for an answer, Tobias stated. Assume the market price per pepper is $5.00. a. HR managers lack business acumen. If Bobby sell 20 glasses of lemonade for $0.20 per cup, and his average total cost is $0.17, what are his economic profits for the day? Following a bumpy launch week that saw frequent server trouble and bloated player queues, Blizzard has announced that over 25 million Overwatch 2 players have logged on in its first 10 days. Salary owed but not yet paid. Other Quizlet sets. Study with Quizlet and memorize flashcards containing terms like , Entry, Exit and more. If the market price of wheat instead falls to $20.00 per bushel, how much wheat will Ali choose to produce per month in order to maximize his profits in the short run? Which of the following is a fundamental characteristic of the market system? Which of the following is one of the Five Fundamental Questions? They can acquire more goods and services. That is, the stockholders are residual claimants. True or False? When Judy went to the grocery store yesterday, she bought three pounds of potatoes. International specialization means directing domestic resources to output which a nation is highly efficient at producing. $$ ** Collected $74,000 of accounts receivable during the year. True or False? When are they likely to exit? Most of the students spent hours preparing their answers and came to class carrying many sheets of paper with their calculations. A professional money manager who has an exceptional year will attract a lot of attention and money. The change increased McDonald's costs, but an article in the Wall Street Journal noted that "McDonald's ability to raise its prices is limited because of stiff competition.". Creative destruction refers to the process by which the creation of new products and production techniques destroys the market positions of firms committed to producing only existing products or using outdated methods. As a result, the revenue you receive from your copy store, while sufficient to cover the wages of your employees and the costs of paper and utilities, doesn't cover all of your rent and the interest and repayment costs on the loan you took out to purchase the copiers. Managerial accounting reports pertain to subunits of the business. In a model compiled to show the economic relationship between two nations, what can be used to determine whether each country has an absolute advantage or comparative advantage? In recent years, what has been the general worldwide trend regarding tariffs? To rule on trade disputes among member nations. Study with Quizlet and memorize flashcards containing terms like Economic growth, Economic growth is normally calculated as a percentage rate of growth per quarter or per, Real GDP per capita means GDP ____________ a. per country b. in real terms c. divided by capital stock d. per person and more. Taxes owed but payable in the following period. Are these products substitutes or complements? Anojan_Thirukumaran5. They can acquire more goods and services. Corporations can only deduct net operating losses going back two years and forward 20 years. This growth rate in dividends is expected to continue indefinitely. This quotation best identifies the: True or False? \text{d. demand curve} & \text{i. marginal utility}\\ Xavier is an accountant who provides tax services through his own firm. Study with Quizlet and memorize flashcards containing terms like Apply revenue recognition principles to various types of transactions., Identify issues with revenue recognition at point of sale, including sales with buyback agreements, sales when right of return exists, and trade loading (or channel stuffing)., Identify instances where revenue is recognized before delivery Which of the following is not a characteristic of the market system? Yes, the government should consider subsidizing LoJack purchases. As the chapter points out there are four possibilities; 1) The managers have private or insider information, which is illegal; 2) They are lucky; 3) They are taking on more risk which will provide a higher return in some years but can also lead to lower than average returns for other years; and 4) Markets are not efficient. For example, the level of the consumer price index by itself conveys little information, but percentage changes in the CPI allow us to measure the rate of inflation. D. A company currently pays a dividend of $4.00 per share. What percentage increase do you need in the following year on your holding to be back to $1,000? What was the European Union called when it was initiated in 1958? *Answer the problem by yes or no. **15. Two major virtues of the market system are that it: Reallocate resources from less desired to more desired uses. Shareholders' legal rights include the ability to elect and dislodge the board of directors of a corporation. $$. What are the three conditions for a market to be perfectly competitive? After one year, a company will pay $20 in dividends. Does the market system result in allocative efficiency? A three-year premium paid on a fire insurance policy. Illinois Driver's Test 2019. A bullet, brand unknown, is fired from the FEG P9 $\mathrm{R}$ pistol. He has described the many books that have become bestsellers by promising to give readers financial advice that will make them wealthy, by, for example, buying and selling real estate. Who make decisions regarding what to produce and how it is produced C. What kinds of products are produced in the economy and Study with Quizlet and memorize flashcards containing terms like A multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and managing value-added activities in other countries T/F, The term "emerging markets" refers to all markets other than the developed markets T/F, GDP is the sum of value added by resident firms, Not necessarily. (a) The unemployment rate is 4.8 percent; (b) the unemployment rate is too high. This is a monopolistically competitive firm because its demand curve is downward sloping. What is Soylent Green's marginal revenue for an extra bushel of soybeans sold? From society's point of view the economic function of profits and losses is to: 1. promote the equal distribution of real assets and wealth. Which statements about tariffs and quotas are true? A. Run-in head What might be the consequences if citizens were not required to serve on a jury? Also, with low share prices many more people participate in the stock market which means a larger source of funds for companies seeking financing and basic principles of economics tells us that the greater the supply, everything else constant the lower the price. What are the differences between the long-run equilibrium of a perfectly competitive firm and the long-run equilibrium of a monopolistically competitive firm? ** Paid$2,320 of utilities expense for the year. Study with Quizlet and memorize flashcards containing terms like If you start and manage a landscaping business on your own, you have likely started a:, When you own a sole proprietorship you and the business are considered one, so you have _ liability for financial obligations such as debt, LLCs do have to submit articles of organization and an operating agreement, but do not In a book he wrote about everyday life in the Soviet Union, Smith made the following observations about shopping in Moscow: 1. Record the above transactions in general journal form. a. an increase in the rate of economic growth b. well-enforced property rights c. a stable international monetary framework d. quotas, A major difference between a tariff and a quota is that a tariff a. will reduce imports, but a quota generally will not. \text{b. demand elasticity} & \text{g. elastic demand}\\ Rent-seeking is different from profit maximization because rent-seeking attempts to influence the political process to gain increased profit or income. It is expected that two years from now the stock will sell for $90.00 a share. With these values plugged into the equation, we determine the Ptoday to be $195.75. **11. Losses 2. Thus, LoJack provides both private benefits and positive externalities. In effect, because Ike is loss averse, he worse off in terms of utility. They can improve their self-sufficiency., In a model compiled to show the economic relationship between two Jennifer experiences. Over the next twelve months it loses 50% of its value. The data are contained in the data file Currency Exchange Rates. a. earn economic losses. Which of the following are ways Darla's business could engage in the global market., A weak You rent store space (signing a one-year lease), and you take out a loan at a local bank and use the money to purchase 10 copiers. These individuals may even work less or retire early. In fact, stockholders may not even be aware of the opportunities because managers and directors do not present them. **2. Both managerial accounting and fi nancial accounting deal with many of the same economic events. A student examines the graph to the right and argues. In a competitive market economy firms select the least-cost production technique because: B. to do so will maximize the firms' profits. Study with Quizlet and memorize flashcards containing terms like The ______ cost of any resource used to produce a good is the value or worth the resource would have in its best alternative use., ________ costs are the monetary payments a firm makes to purchase resources from others., Your company's total sales revenue for the month is $150,000; the costs to At the end of the year, she shows an accounting profit of $85,000 on her income tax return. Suppose the figure to the right represents the market for a particular brand of shampoo, such as L'Oreal, Lancome, or Maybelline. Study with Quizlet and memorize flashcards containing terms like Accumulated Depreciation, Acreage Reporting Date, Actual Cash Value (ACV) and more. A market system features the private ownership of resources and the use of markets and prices to coordinate and direct the majority of economic activity. ** On February 1, paid the accounts payable of$980, but not within the discount period. 5. C. share of ownership of the company. liability, and property damage policies. 3. contribute to a more equal distribution of income. The ability of stockholders to influence these choices enhances the attractiveness of owning shares and therefore increases the willingness of individuals to purchase stocks. (If necessary, review Section $A.1$). True or False? Is the bullet likely to be manufactured by Winchester? c. earn zero economic profits. For many indexes, the real value is to be able to compute percentage changes in the index over time. From the perspective of the theory of efficient markets, explain why it may be difficult for professional portfolio managers who have an exceptional year to continuously outperform the market average. Assuming a corporation has not sold stock to the public, conducting corporate business is straightforward. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams. The enitre market for apples is shown in the figure below. The cheap foreign ______ argument says that trade protection is required to ensure that cheap imports do not flood U.S. markets, dragging down prices of goods and U.S. wages. (b) What profit-maximizing price per soda should Coastal charge, how many sodas per day would it expect to sell at this price, and what would be the daily profits? 1,978 ** On September 5, purchased on account 30 standard alarm systems at a cost of $265. \text{Prepaid rent}&&\text{2,000}\\ With bankruptcy more likely during a recession, the expected losses associated with being a residual claimant are higher. Considering the risks associated with investing in stocks (over short periods of time), what types of investments would you expect investors to buy during an economic recession? Which of the following is a fundamental characteristic of the market system? Tests were also conducted with Uzi and Black Hills ammunition. If the expansion proves to be profitable it can certainly turn out to be a good decision for the stockholders who may see the higher return from leverage. The beer drinkers claimed that Kona was marketed as if it were brewed in Hawaii, but the beer is actually brewed in Oregon, Washington, Tennessee, and New Hampshire. \text{Supplies}&&\text{150}\\ How does the problem of limited and bundled choice in the public sector relate to economic efficiency? ** Paid$7,200 on May 1 for one year's rent on the office in advance. Ideally, those investors who value the stock most should have access to purchase the stock, regardless of which market they are located in. The concept of consumer sovereignty refers to situations in which consumers are represented on the board of directors of large corporations. At what price would Smitten earn a normal profit? "Sinc Study with Quizlet and memorize flashcards containing terms like Which of the following are functions of exports assistance centers (EACs), Darla's bicycle ship in the United States is experiencing a slowdown in its growth. Julia___Bryja. $$ is essentially: D. "Through the profit potential that encourages development of new technology.". Staff positions are directly involved in the companys primary revenue-generating activities. What are the two major differences? During an economic recession, U.S. Treasury securities are relatively more attractive than stocks, so we would expect that investors would purchase more of them relative to equity shares. A 10% increase in the share price of A results in a market value of $275,000, which is a 10% increase. True or False? Minimum ATC b. earn economic profits. Those instances of "regulatory capture" imply that this statement is overly confident in the ability of government regulatory agencies to keep powerful businesses in check. You hear someone claim that stocks are less risky than bonds. \text{e. Law of Demand} & \text{j. unit elastic demand}\\ It reduces animosity among nations that trade with each other. Over the next twelve months it loses 40%; the following year it has a gain of 30%. The income elasticities of demand for movies, dental services, and clothing have been estimated to be +3.4, +1, and +.5, respectively. She believes, however, the stock of this company will sell for $110.00 per share four years from now. The term 'rent' refers to any payment is excess of the minimum amount that is necessary to keep the resource employed in its current use. 86 terms. ** Recognized the expired rent for both the van and the office building for the year. alyclark21. Which demand curve in the graph to the right is associated with the shutdown point for this perfectly competitive firm? The wants of consumers are expressed in the product market with "dollar votes". A. Neoclassical economics believes that government should play a minimal role in the economy, while behavioral economics calls for a more active role for government. 10. A decrease in the quantity of resources employed in industry X. (The company uses the gross method.) It expects the growth rate of the dividend to be 3% (0.03) annually. The board can also dislodge managers and officers who are performing poorly. What are Cathy's profits/losses per day if she produces the profit-maximizing quantity of corn in the short run (losses are expressed as a negative number)? 1.The graph at right represents the situation of Karl Kumquats, a kumquat grower. Financial accounting reports are general-purpose reports. D) the probability of a loss occurring., Objective risk is defined as A) the probability of loss. If it issues bonds it will have to pay $8.00 in interest for every $100 borrowed. As it relates to the political process, the principal-agent problem results from the: inconsistency between voters' interest in programs and politicians' interest in reelection. * How might a monopolistically competitive firm continually earn economic profit greater than zero? Suppose the price of wheat rises to $5.00 per bushel. The economic function of profits and losses is to: B. signal that resources should be reallocated. The managers and directors on the other hand may prefer job security and look at the increased risk as decreasing this job security if the results are poor, so may steer away from opportunities that stockholders would welcome. Write a report describing how accu- rately the participants guessed the same foods. What would the profit-maximizing quantity be if the market price was $6.50? The data are contained in the data file Currency Exchange Rates. 28,084 The presence of market failures implies that: B. there is an active role for government, even in a market system. Farmer Parker's profit-maximizing level of production is 6 bushels of wheat. If false, indicate how to correct the statement. Should be larger to better satisfy consumers' desire for the product. is essentially: True or False? B) any situation in which the probability of loss is zero. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. What are the likely reason(s) that the market for dress shirts is not perfectly competitive? The financial writer Andrew Tobias has described an incident when he was a student at Harvard Business School: Each student in the class was given large amounts of information about a particular firm and asked to determine a pricing strategy for the firm. The graph to the right shows a firm in a perfectly competitive market making a profit. \begin{array}{lcc} The market system's answer to the fundamental question "How will the goods and services be produced?" Does the fact that monopolistically competitive markets are not allocatively or productively efficient mean that there is a significant loss in economic well-being to society in these markets? 1.Refer to the graphs above. Because profits and/or losses are the motivation behind the fundamental decisions made in a market system, it could be called a "profit and loss economy.". **12. A. Neoclassical economics believes that government should play a minimal role in the economy, while behavioral economics calls for a more active role for government. Losses 2. \text{Salaries payable}&&\text{1,500}\\ D. The common stockholders may have mixed feelings about this announcement. The result is competition and widely dispersed economic power. **Velocity of Winchester bullets. Study with Quizlet and memorize flashcards containing terms like The valuation of an MNC should decline when an event causes the expected cash flows from foreign subsidiaries to ____ and when the foreign currencies denominating these cash flows are expected to ____., The agency costs of an MNC are likely to be higher if it, The Sarbanes-Oxley Act caused corporate Why do economists generally support the Trade Adjustment Assistance Act? Explain the following comment: "Want to make millions of dollars? Mibanco in Peru plays an important role in the Latin American microfinance sector. ** Paid $3,500 of advertising expense during the year. Fill in the marginal revenue (MR) and average revenue (AR) columns. Discuss the inefficiencies that can be caused by stock market bubbles, especially focusing on firms and consumers. a. HR managers lack business acumen. B. one's assets net of one's liabilities at any point in time. What effect does the entry of new firms have on the demand curve of an existing firm in a monopolistically competitive market? c. As of December 31, Henderson had earned $4,000 of charter revenue that has not been recorded or received. There are approximately 400,000 corn farmers, so the average output per farmer is about 35,000 bushels. A tariff generates revenue for the domestic government. In reality all of the food is cooked in one central kitchen and none of the restaurants have a physical location. B) any situation in which the probability of loss is zero. This negotiation will occur as long as property ownership is well defined, only a few people are involved, and bargaining costs are low. Explain. Why is arguing for a tariff to save U.S. jobs popular during a recession? ** Made a full refund to a dissatisfied customer who returned her alarm system. Economic systems differ according to what two main characteristics? In the short run, how much corn should Cathy produce each day to maximize profits? 15 terms. ashryx. True or False? Study with Quizlet and memorize flashcards containing terms like Match the example with the correct market modification method: The Florida Orange Growers Association advocates drinking orange juice throughout the day rather than for breakfast only. This growth rate for dividends is expected to continue indefinitely. In $2014$ Mibanco's profit margin fell to under $1 \%$ and $12 \%$ of its loans to small businesses had not been repaid within one month of the required date; and $61 \%$ of its customers had also taken out loans with other banks. 7. The sale had been a cash sale for $550 with a cost of$260. Explain how a well-functioning stock market contributes to the efficiency of the economy. C. have no influence on the composition of domestic output. d. produce a lower quantity of output than is socially optimal. C. entails the exchange of goods for goods. 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