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.". geo test ch 2 essay questions. What divergences arise between equilibrium output and efficient output when (a) negative externalities and (b) positive externalities are present? What do neoclassical economics and behavioral economics believe about giving people options? Supplies on hand. Study with Quizlet and memorize flashcards containing terms like 1. If the interest rate is 6% (0.06) what does the dividend-discount model predict the current price of the stock should be? U.S. firms will produce more than 100 tons of corn and export the excess, selling it at the world price. In a command system the government owns most property resources. Suppose that an individual sees a tremendous opportunity to produce and sell a new product, but dismisses the idea because there is no way to exploit this opportunity for personal gain. Assume that the market price of wheat falls to $35.00 per bushel. Given the market price of lawnmowers, if Sergei wants to maximize profits he should: If Sergei's production costs are typical of all of the perfectly competitive firms in the lawnmower industry, over time: firms will start to enter the market because economic profits are greater than normal economic profits.. Which statements about tariffs and quotas are true? The two basic markets shown by the simple circular flow model are: C. households sell resources to businesses. The attention may be in the form of other professional managers who will copy the actions of the successful manager. 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. In particular, they achieve high speed and low energy use at the cost of precision and accuracy. Utilities owed but not yet paid. They can acquire more goods and services. The theory of efficient markets says we should expect the price of the company's stock to: According to the theory of efficient markets: According to the theory of efficient markets, mutual fund managers may be expected to earn above-average returns if they: Stocks appear to present risk, yet many people have substantial parts of their wealth invested in them. a. The result would be fewer participants in the equity markets and less liquidity in the market which will decrease efficiency since stocks would be less attractive. An opportunity cost is what was sacrificed to do or acquire something else. We've seen that Panera Bread spent two years changing its recipes as part of its "clean food" strategy. What is the main effect of increasing opportunity costs? When markets are efficient, the price at which a stock currently trades reflects all available information, so the future price movements are unpredictable. Since the firm is incurring short-run losses, the management is debating whether to continue operations. Which argument against free trade becomes particularly popular when the economy goes into a recession? The daily demand function is A startup firm in a perfectly competitive market finds that its average total cost is higher than the market price. From the highest to lowest likely utility, we would rank the options as follows: Cash, gift card, specific item. ** Paid the salaries payable from 2014. 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. When Judy went to the grocery store yesterday, she bought three pounds of potatoes. If consumer desire for product X increases, all of the following will occur except: Notion that, under competition, decisions motivated by self-interest promote the social interest. D. unlimited liability to the owner of the stock., Two characteristics that make owning stock attractive are: A. unlimited liability and first claim on Farmer Parker's profit-maximizing level of production is 6 bushels of wheat. Rent-seeking is an appeal to the government for special benefits at taxpayers or someone else's expense. 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 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. What does behavioral economics have to say about each of the following statements? C) uncertainty concerning the occurrence of loss. What will happen to the quantity of McDonald's cheeseburgers demanded? **Adjustments** \text { Athens } & 27 & 7 Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. D. Yes. State (a) a positive economic statement of your choice, and then (b) a normative economic statement relating to your first statement. Relate this information to the following statement: The message of the production possibilities curve is that an individual nation is limited to the combinations of output indicated by its production possibilities curve. 1. is produced up to the point where the marginal benefit for consumers equal the marginal cost of producing it. In the previous example we plotted the USD to 1 EUR for a 6-month time period. B. Neoclassical 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. What do bondholders and stockholders have in common? \end{array} To maximize profits or minimize losses this firm should produce. \text { City } & \text { Police } & \text { Number of Crimes } \\ Use a time-series plot to graphically display the currency conversion from the EUR to 1 USD. "Those willing and able to pay for them.". geo test ch 2 essay questions. 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 Determine annual depreciation assuming the straight-line depreciation method is used. In the last decade or so there has been a dramatic expansion of small retail convenience stores (such as 7 Eleven, Kwik Shop, and Circle K), although their prices are generally much higher than prices in large supermarkets. Only realized profits with reasonable certainty are recognized in the profit and loss account However, provision is made for all known expenses and losses whether the amount is known for certain or just an estimation This treatment minimizes the reported profits and the valuation of assets 19 The market system's answer to the fundamental question "How will the goods and services be produced?" How much resources are available in the economy and where they are located B. Profits 4. ( 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)? 4d. \text{Salaries payable}&&\text{1,500}\\ We can expect that each successive week: How can time be incorporated into the theory of consumer behavior? Illinois Driver's Test 2019. When the bubble bursts these individuals are left trying to adjust, which can be not only inefficient but traumatic. p=2-0.0004 x If consumer desire for product X increases, all of the following will occur except: D. a decrease in the quantity of resources employed in industry X. At this level of production he produces following the rule Marginal Revenue = Marginal Cost and earns the maximum possible profit of $8.00. How do nations benefit from international trade? C. share of ownership of the company. a. The interest rate is 7.5%. "Because the outputs of many industries are the inputs to other industries, the failure of any single industry to fulfill the output quantities specified in the central plan caused a chain-reaction of adverse repercussions on production."  A store-specific gift card worth $15, a $15 item from that specific store, and $15 of cash that can be spent anywhere. A recent study found that an increase in the federal tax on beer (which would increase the price of beer) would reduce the demand for marijuana. Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. Likewise, if the market is not offering enough of a good to satisfy consumer demand, the price will rise. Which of the following is one of the Five Fundamental Questions? Managerial accounting reports pertain to subunits of the business. 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. 1.The graph at right represents the situation of Karl Kumquats, a kumquat grower. Who make decisions regarding what to produce and how it is produced C. What kinds of products are produced in the economy and Using ABC to allocate manufacturing overhead can help managers to: \begin{matrix} **10. 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. Is the set of integers the union of the set of even integers and the set of odd integers? Which of the following best describes the invisible-hand concept? rnremley Plus. 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 Philosophy Study Set. B. share in the company's debts. When the world price for a product is below the Canadian price, what will Canada experience? Increasing a product's use, Finding new customers, Creating a new use situation, Match the example with the correct market Assuming a corporation has not sold stock to the public, conducting corporate business is straightforward. They can improve their self-sufficiency., In a model compiled to show the economic relationship between two In recent years, what has been the general worldwide trend regarding tariffs? Behavior economics would say that people often act in their own self-interests; however, not exclusively. Suppose the owner of one of the winerieslong dashJerry's Wine Emporiumlong dashraises the price of his wine by $5.00 per bottle. 7. Who make decisions regarding what to produce and how it is produced C. What kinds of products are produced in the economy and Assume instead the market price per pepper is $2.00. That is, the stockholders are residual claimants. price is greater than marginal cost; price is equal to marginal cost. shift to the left and become more elastic. 86 terms. Requirements Study with Quizlet and memorize flashcards containing terms like T/F - Downloading music into a computers random access memory, or RAM, without authorization is copyright infringement., T/F - A franchisee's breach of the duty of honesty and fidelity can be enough to allow a franchisor to terminate a franchise even if their contract contains a notice-and-cure provision, Donuts Whole C) uncertainty concerning the occurrence of loss. Study with Quizlet and memorize flashcards containing terms like T/F - Downloading music into a computers random access memory, or RAM, without authorization is copyright infringement., T/F - A franchisee's breach of the duty of honesty and fidelity can be enough to allow a franchisor to terminate a franchise even if their contract contains a notice-and-cure provision, Donuts Whole On one hand, they may applaud the proposal because (as we saw in the chapter), the use of leverage by a firm can increase the expected return to equity, which are the stockholders. In a market economy a significant change in consumers' desire for product X will: Assuming competition, private and public interests will coincide. Shifting work that was previously done by American workers to workers abroad is called what? 28,084 Study with Quizlet and memorize flashcards containing terms like Traditionally, risk has been defined as A) any situation in which the probability of loss is one. D. The intersection of one nation's import demand curve and another nation's export supply curve represents ______. This negotiation will occur as long as property ownership is well defined, only a few people are involved, and bargaining costs are low. \text { Carey } & 12 & 21 \\ 2. The economy would probably be less efficient. Assume the individual has a discount rate of 8% (0.08). This is an example of a, Jennifer buys a piece of costume jewelry for $33, for which she was willing to pay $42. Suppose that, on the basis of a nation's production possibilities curve, an economy must sacrifice 10,000 pizzas domestically to get the 1 additional industrial robot it desires but that it can get the robot from another country in exchange for 9,000 pizzas. The use of money contributes to economic efficiency because: To do so will maximize the firms' profits. ** Sold an additional monitoring service for $1,200 for one year's service. Compute the current price of this stock, using the dividend-discount model. a. HR managers lack business acumen. If competitive industry Y is incurring substantial losses, output will: Businesses are sellers of final products. 6. If the Dow Jones Industrial Average is currently at 10,000 and the price of one stock included in the index increases by $10, the Dow Jones Industrial Average will: If the Dow Jones Industrial Average is at 10,205 and it is up 4% from the previous day, what was the index at the close of the market the previous day? Alexander Holmes, Barbara Illowsky, Susan Dean, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal. Soylent Green is a perfectly competitive firm that produces soybeans. The data are contained in the data file Currency Exchange Rates. Diversification of their industries would increase domestic stability. **4. Study with Quizlet and memorize flashcards containing terms like Accumulated Depreciation, Acreage Reporting Date, Actual Cash Value (ACV) and more. Calculate Ali's monthly profits (express a loss as a negative number) if he chooses to produce the profit-maximizing quantity of wheat at a price of $56.00. Julia___Bryja. POLSKI. They can acquire more goods and services. b. earn economic profits. is essentially: True or False? **KEY INDICATORS** Mibanco at year-end $2013$: An article on chicagotribune.com quoted the firm's CEO as saying: "I don't really think anybody cares. a. During 2015, Pacilio Security Services experienced the following transactions: What is rent seeking and how does it differ from the kinds of profit maximization and profit seeking that we discussed in previous chapters? This means that the most they can lose is their original investment, which pertains to the limited downside. a. ** Purchased with cash another 25 alarm systems on August 1 for resale at a cost of$260 each. B. are essential to the reallocation of resources from less desired to more desired goods. 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. Competition from other nations building plants in Mexico. 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. The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost (ATC) curve, average variable (AVC) curve, and marginal cost (MC) curve. ** On January 15, purchased 20 standard alarm systems for cash at a cost of $250 each. Jennifer experiences. The council requested that the head of police conduct research on other cities of a comparable size to ascertain the correlation between the number of officers and the volume of reported crimes before making a final decision. Study with Quizlet and memorize flashcards containing terms like Determine whether each of the following examples would be included in Gross Domestic Product (GDP). \text{e. Law of Demand} & \text{j. unit elastic demand}\\ Contract as resources move away from industry Y. Government regulatory agencies sometimes fall under the sway of the industries that they are supposed to be regulating. Produce more than Canadian customers will buy, and sell the surplus to the United States. they are able to purchase a differentiated product that more closely suits their tastes. **5. Suppose Farmer Smith grows apples. The U.S. Treasury bond yield is 8% and the equity-risk premium is equal to 2.5%. They keep Big Business in check.". 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 Which demand curve in the graph to the right is associated with the shutdown point for this perfectly competitive firm? Which of the following is not a characteristic of the market system? Q profit max 3. Farmers quiz. In economics, this is known as the principal-agent conflict and is the focus of significant research in economics and management. A company currently pays an annual dividend of $6.50 per share. The current value of the index is 50. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. \text { Woodville } & 22 & 6 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.". Farmer Jones grows apples. After one year, a company will pay $5 in dividends. Assume the domestic price of corn is $1.00 and the quantity of corn produced is 100 tons. What is an opportunity cost? After one year, a company will pay $20 in dividends. 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 company could perform poorly, so poorly in fact that it could go bankrupt leaving many liabilities unpaid. While heuristics are fast and frugal, they are not perfect. No, the demand curve is not horizontal because Chicken McNuggets are not identical to other chicken products. The ruling would make the price elasticity of demand more inelastic than if there were no such rule, assuming that there is not another equivalent university nearby to which students could transfer. 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.. To maximize profits or minimize losses this firm should produce. Is it possible to say whether this firm is a perfectly competitiveLOADING firm or amonopolistically competitiveLOADING firm? $$. \begin{array}{lrr} C(x)=800+0.2 x+0.0001 x^2 Other Quizlet sets. It is believed the stock will sell for $100 one year from now, and an investor has a discount (interest) rate of 6% (0.06). Stockholders do not face a ceiling on potential returns, which is the reason why the upside potential can be called "unlimited.". What is the current value of this index? Is there an altitude at which the pressure is exactly zero? In the table below, fill in Apple of My Eye's quantity supplied in the short run. Managerial accounting reports are prepared only quarterly and annually. Why are stock market bubbles costly for the economy? (Use the Utilities Payable account.) If the prices of stocks reflect fundamental values, the resource allocation mechanism of the stock market works well. Market prices act as an "invisible hand," coordinating an economy by rationing what is scarce and providing incentives to produce the most desired goods and services. to skip breakfast to get a few extra minutes of sleep, to attend college, or to make a purchase. B. are essential to the reallocation of resources from less desired to more desired goods. is essentially: D. "Using the least-cost production techniques.". Why does the Dow Jones Industrial Average have a value over 10,000 when the 30 stocks that make up the index all have values less than $200 per share? What institution is in charge of overseeing trade agreements and ruling on disputes relating to them? \hline \text { Holgate } & 17 & 7 \\ 86 terms. If a firm charges a foreign market a lower price than it charges the domestic market, that firm is said to be ______ its product. A firm charges a price to a foreign market that is lower than its production costs. Mary says, "You would have to pay me $50 to attend that pro wrestling event." It commits to paying $21 two years from the current date. c. HR managers need to show how their HR practices support Frances sells pencils in the perfectly competitive pencil market. b. earn economic profits. 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 We can employ the formula from the text: 100. 8. 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 Participants act in their own self interest and seek to maximize satisfaction or profit through their own decisions regarding consumption or production. Reporting after incorporation. This is because the producer, who is not bearing the full cost of production, will be able to produce more at a lower price than the efficient level, which would exist if true costs were reflected in the production decision. a firms ability to differentiate its product, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Carl S Warren, James M Reeve, Jonathan E. Duchac, Fundamentals of Engineering Economic Analysis, David Besanko, Mark Shanley, Scott Schaefer. Use the graph to estimate the altitudes at which the pressure is $23,19 ,$ and $13$ inches of mercury. (B) At the growth rate indicated, how long will it take the population of Mexico to double? Study with Quizlet and memorize flashcards containing terms like Accumulated Depreciation, Acreage Reporting Date, Actual Cash Value (ACV) and more. alyclark21. Study with Quizlet and memorize flashcards containing terms like , Entry, Exit and more. Assume the domestic price of corn is $1.00 and the quantity of corn produced is 100 tons. D. 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 They can improve their self-sufficiency., In a model compiled to show the economic relationship between two Evaluate and explain the following statements: (a) The quotation is accurate. The risk premium is the compensation the investor requires due to the fact that the future selling price of the stock is uncertain. In monopolistically competitive markets, what is a factor under a firm's control that determines whether it will be successful? Let MC be the marginal cost curve and ATC be the long-run average total cost curve. The idea that protective tariffs are needed to preserve industries that produce the materials essential for national defense is called the ______ argument. In a sentence, describe the meaning of the phrase "invisible hand.". Suppose you decide to open a copy store. C. workers specialize in various production tasks. Which of the following markets is most likely to be perfectly competitive? 4. reallocate resources from less desired to more desired uses. The following table shows two points on the demand curve for the heirloom tomatoes she sells: Suppose a monopolistically competitiveLOADING firm sells a particular brand of jeans. 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. True or False? Coastal Soda Sales has been granted exclusive market rights to the upcoming Beaufort Seafood Festival. There are determinants of demand, which are factors that may shift the demand curve, or cause a "change in demand." They can specialize their production. How much resources are available in the economy and where they are located B. **Use technology to solve each system of equations, if a solution exists. Which country has an abundant labor force suited to produce labor-intensive goods? B. one's assets net of one's liabilities at any point in time. If we use the intensity figure from the textbook, the $1,000 loss is felt 2.5 more intensely than the $1,000 gain. 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. You have a portfolio valued at $10,000. The price that equates the quantities supplied and demanded globally through international trade. 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? Suppose industry A is realizing substantial economic profit. While this can be substantial during good years, it also means that during bad years the stockholders may get nothing, and if the corporation does poorly for a number of years, the stockholders' investment can be lost. Pete's Electronics is a small company that produces 8 gigabyte flash drives in a perfectly competitive market. They just want really high-quality food.". Which of the following best explains the difference between neoclassical economics and behavioral economics? Money Capital Labor Land and more. The ability of stockholders to influence these choices enhances the attractiveness of owning shares and therefore increases the willingness of individuals to purchase stocks. 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.". 1. produce 1,000 units of output and break even with a price of $10.00. What possibilities exist to explain the claim made by many professional portfolio managers that they can exceed the average stock market return year after year? Study with Quizlet and memorize flashcards containing terms like T/F - Downloading music into a computers random access memory, or RAM, without authorization is copyright infringement., T/F - A franchisee's breach of the duty of honesty and fidelity can be enough to allow a franchisor to terminate a franchise even if their contract contains a notice-and-cure provision, Donuts Whole ** Collected $74,000 of accounts receivable during the year. ** 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. 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? 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? C. have no influence on the composition of domestic output. Subscriptions received in advance by a magazine publisher. How does the idea relate to the definition of economics?, Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal cost and marginal benefit, State (a) a positive economic statement of your choice, and then (b) a normative economic Specialization and trade have the same effect as having more and better resources or discovering improved production techniques. The desires of resource suppliers and producers to further their own self-interest will automatically further the public interest. Bondholders are not owners of the company, meaning that they are not entitled to a share of the firm's profits, nor are they involved in the voting of the firm's managers. 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.. Henderson expects to use the boat for five years and that it will have a residual value of $5,500. Suppose there is a reduction of the return provided on U.S. Treasury bonds. B. businesses are sellers of final products. What return does the portfolio need to earn over the following twelve months to be restored to its original value? \text{Supplies}&&\text{150}\\ The market system's answer to the fundamental question "What will be produced?" Multiple select question. Complete the following table showing the demand for snow skiing lessons per day. If the domestic price in Canada is $0.75 and the domestic price in the United States is $1.00, what will Canadian companies do? These are the number of buyers, the tastes (or desires) of the buyers, the income of the buyers, the changes in price of related commodities (substitutes and complements), and expectations of the buyers regarding the future price of the commodity under discussion. C. an asset that people are willing to accept in exchange for goods and services. 4b. The payment to the equity holders and the expected return are as follows, (i) for 0% debt financing, the payment is $75 - $150; with an expected return of 11.25%; (ii) with 50% debt financing the payment to equity holders will be $35 - $110; with an expected return of 14.5%; and finally, (iii) with 80% debt financing, the payment to the equity holders will be $11 - $86; with an expected return of 24.25%. ** Recognized the expired rent for both the van and the office building for the year. As of December 31, H enderson has completed the charter. Money Capital Labor Land and more. Hardly. Xavier is breaking even and should continue to produce to continue breaking even in the long run. In a two-nation model, international equilibrium is determined by the ______ of one country and the ______ of the other country. **6. The theory of efficient markets assumes that: The notion that stock prices reflect all current available information: People who claim to have the ability to accurately predict the future prices of stocks: In the first calendar quarter a company issues a surprising report saying that it expects profits to rise in the fourth quarter. \text{d. demand curve} & \text{i. marginal utility}\\ ** Accrued salaries at December 31, 2015, were $1,000. Shortages and unmet demand provide opportunities for individuals and firms to profit under capitalism, but they present no such opportunities under central planning. What are Miguel's daily economic profits (or losses) if he produces the profit-maximizing quantity of peppers? Round up to the next $100.14,356$, or 14,400 . In 2017, two beer drinkers in California filed a lawsuit against Kona Brewing Company, which sells Kona beer. From society's point of view the economic function of profits and losses is to: Encourages innovation because successful innovators are rewarded with economic profits. &\text{Adjusting Entry}&\text{Accounts on the}&\text{Over /}&\text{of Accounts on the}&\text{Over /}\\ Assuming a corporation has not sold stock to the public, conducting corporate business is straightforward. If competitive industry Z is making substantial economic profit, output will: C. expand in industry Z, as more resources will move to that industry. Why are they called inputs? What effect does the entry of new firms have on the demand curve of an existing firm in a monopolistically competitive market? No, they will experience neither economic profits nor economic losses in the long run, unless they continually differentiate their products. Other Quizlet sets. where $x$ is the number of units. \text{Cash}&&\$62,860\\ Dumping occurs in which of the following situations? B. are essential to the reallocation of resources from less desired to more desired goods. A tariff imposed on Chinese imports into the United States tends to ______. The customer paid the full amount of$1,200 on October 1. b. 8. On the other hand, the stockholders are residual claimants, so the increased use of bonds means the company is required to honor its liabilities to the bondholders (interest payments) before any profits are distributed to the stockholders. Why is arguing for a tariff to save U.S. jobs popular during a recession? 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 You are a top Treasury official for a developing country who has been asked for advice on how to best open the nation's stock market to foreign investment. Improves motivation and retention a. earn economic losses. Use Figure 4.6b to explain why this situation of dual positive externalities might lead to an underallocation of resources to both apple growing and beekeeping. At the end of two years your portfolio is worth: You start with a portfolio valued at $500. Is the Efficient Markets Hypothesis (EMH) responsible for the financial crisis of 2007-2009? Explain **two** advantages of microfinance to small businesses in a country such as Peru. Should be larger to better satisfy consumers' desire for the product. This growth rate for dividends is expected to continue indefinitely. 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. What effect would a rule stating that university students must live in university dormitories have on the price elasticity of demand for dormitory space? The country produces more of its most profitable goods. josh_parker_wang. At the market price of $4.00 per apple pie, how many apple pies should Baker Street make? (If necessary, review Section $A.1$). If Walter's costs are typical in the industry, we would expect that in the long run: new firms would enter the market for watches, the price would fall, and each individual firm in the market would produce fewer watches. Property rights are important because they: B. encourage cooperation by improving the chances of mutually agreeable transactions. Farmers quiz. 1.changing the price affects the quantity sold because firms sell differentiated products. c. earn zero economic profits. True or False? Suppose the figure to the right illustrates the cost curves for a firm in a perfectly competitive market. \ Economic profits and losses: A. are both considered by economists to be a part of production costs. b. Henderson purchased a nine-month boat insurance policy on November 1 for$8,100. Fees earned but not yet received. The market system's answer to the fundamental question "Who will get the goods and services?" Which of the following is a fundamental characteristic of the market system? Economists have debated the effects of monopolistically competitive market structures on the well-being of society. Which industry structure is more efficient? In reality all of the food is cooked in one central kitchen and none of the restaurants have a physical location. C. share of ownership of the company. Managerial accounting applies only to merchandising and manufacturing companies. Economic profits and losses: A. are both considered by economists to be a part of production costs. b. Ford Motor Company buys four tires to put on a new Ford Mustang. Philosophy Study Set. Suppose the figure to the right represents the market for a particular brand of shampoo, such as L'Oreal, Lancome, or Maybelline. Which method provides a better measure of a company's economic activity each period? $$ Julia___Bryja. What business activity shifts work previously done by American workers to workers located in other countries? 2. Reduced spending on imports can be diverted to domestic spending and increase domestic employment. **19. The DJIA accounts for stock splits over the years, which are reflected in the average but not in the current price of the stock, and the companies included in the index change periodically. **3. Firms in a perfectly competitive market earn accounting profit, but no economic profit. In a market economy the distribution of output will be determined primarily by: B. the quantities and prices of the resources that households supply. Peel and cut the food into pieces. 3. contribute to a more equal distribution of income. No, they will experience neither economic profits nor economic losses in the long run, unless they continually differentiate their products. International specialization means directing domestic resources to output which a nation is highly efficient at producing. The use of money contributes to economic efficiency because: D. it promotes specialization by overcoming the problems with barter. b. Minimum ATC 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. If the world price of corn exceeds $1.00, then U.S. producers will produce ______ than 100 tons of corn, creating a ______ that will be ______. Economic profits attract firms to enter an industry, and economic losses cause firms to exit an industry. An increase in consumer desire for strawberries is most likely to: A. increase the number of strawberry pickers needed by farmers. 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, josh_parker_wang. How much wheat will Ali choose to produce per month in order to maximize his profits in the short run? If the price of A increases by 10% this raises A's price to $33 and the value of the index to 51.5, or an increase of 3%. True or False? 9. Write a report describing how accu- rately the participants guessed the same foods. Explain the following comment: "Want to make millions of dollars? C. have no influence on the composition of domestic output. Suppose the price of wheat rises to $5.00 per bushel. If the interest (discount) rate is 5% (0.05) what does the dividend-discount model predict the current price of the stock should be? The market system's answer to the fundamental question "How will the system promote progress?" A company currently pays a dividend of $4.00 per share. 4. reallocate resources from less desired to more desired uses. A donor conveys a gift to a charity that is to be conveyed to a separate beneficiary. Round whole numbers up to the next 100 . If sellers find themselves at a given price with more output than consumers are willing to purchase, they will lower the price. Economic systems differ from one another based on who own the factors of production and: A. 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 The index however is constructed from the value of both companies, and the total value increases from $350,000 to $375,000, or 7.14%. Does the concept of limited liability make owning stocks more or less attractive? Some people are chartists, others behaviorists. Thus, LoJack provides both private benefits and positive externalities. Wheat is a homogeneous good, while Panera Bread is able to differentiate its food from other restaurants. \begin{array}{lcc} fall because the supply of beef will increase as new firms enter the industry. What might be the logic behind this relationship? How much is invested in the CD. The data are contained in the data file Currency Exchange Rates. Because hides were more expensive, it became more costly to produce leather, reducing the supply and raising the price of leather goods. A professional money manager who has an exceptional year will attract a lot of attention and money. economic profits will be zero. If Henderson had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated. $$ (The company uses the gross method.) It expects the growth rate of the dividend to be 3% (0.03) annually. a detailed examination of specific economic units that make up the economic system. They collect any remaining assets once the bondholders (and other lenders) are paid. This expression is a time saving way of making the point that for a person who can make so much per hour, every hour spent not working is so much money not made. It is expected that two years from now the stock will sell for $90.00 a share. 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. If the market price for apple pies were to rise to $6.00 per apple pie, how many apple pies should Baker Street make? Assuming a corporation has not sold stock to the public, conducting corporate business is straightforward. *Answer the problem by yes or no. D) the probability of a loss occurring., Objective risk is defined as A) the probability of loss. 39 terms. 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. **15. Based on the dividend discount model, how is it possible for these stocks to sell for a positive price? From information presented in Chapter 8, you should be able to identify at least two reasons an investor may want to consider an index fund over a managed (mutual) fund. Many small companies currently pay no dividends to their shareholders. This statement best describes the concept of: Which of the following is not one of the five fundamental questions? If a competitive industry is neither expanding nor contracting, we would expect: D. encourages innovation because successful innovators are rewarded with economic profits. Nations that depend heavily on one main export should impose trade barriers to protect domestic production of other goods. a. earn economic losses. It can either issue stock or bonds, or some combination of both. In the short run, how much corn should Cathy produce each day to maximize profits? In addition to the benefits of human and geographical specialization, what are some side benefits to free trade? Study with Quizlet and memorize flashcards containing terms like What is an opportunity cost? \text{Retained earnings}&&\text{39,190}\\ This behavior could be explained by: Professor Jeremy Siegel, of the University of Pennsylvania, did research showing that: Professor Jeremy Siegel, of the University of Pennsylvania, conducted research that showed that: Mutual funds are characterized by the fact that they all: Index funds are often preferred to other mutual funds because: When stock prices reflect fundamental values: The fact that returns from the stock market are less volatile over long-periods of time suggests that: Stock market bubbles typically lead to all of the following except: Which of the following could cause a stock market bubble? 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. Assume the market price per pepper is $5.00. Suppose an assistant professor of economics is earning a salary of $70,000 per year. As a result, they not only recover 90% of LoJack-equipped cars that are stolen but also arrest many auto thieves and shut down many "chop shops" that take apart stolen vehicles to get at their used parts. The cross elasticity of the two products above is negative. D. What goods and services will be produced? According to various studies, how do trade protections, such as tariffs and quotas, tend to affect domestic society? Set product prices. If Sergei's production costs are typical of all of the perfectly competitive firms in the lawnmower industry, we would expect that in the long run: the market price would fall to $400 per lawnmower and each firm in the market would produce 10 lawnmowers per week. Ask several friends to participate. 1. Finally, assume the company will earn $150 in good years and $75 in bad years, with equal probability. increase profits by making the demand curve for the product more inelastic. Why isn't the actual level of an index, for example the Dow Jones Industrial Average, very useful on its own? 15 terms. Neoclassical economics focuses on providing more options; behavioral economics focuses on helping people make better decisions with the options available. ** On March 1, leased a business van. **12. What are the likely reason(s) that the market for electricity is not perfectly competitive? d. Henderson's fishing boat was purchased on January 1 at a cost of$80,500. What are Smitten's weekly profits if the market price is $6 per pair and the firm produces the profit-maximizing quantity of mittens? Economic systems differ from one another based on who own the factors of production and: A. C. share of ownership of the company. Minimum ATC All are normal goodsincome and quantity demanded move in the same direction. Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. 289 What are Smitten's weekly profits if the market price is $5.50 per pair and the firm produces the profit-maximizing quantity of mittens? Most are managed by professional managers and they provide different fees or costs for these management services. 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 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? Are these products substitutes or complements? Now, the government has a plan to create two markets: one for domestic residents and one for foreign investment. Dress shirts are not a standardized (homogeneous) product. Use the five issues an investor should consider when purchasing stock to explain the popularity of mutual funds. You hear someone claim that stocks are less risky than bonds. 4. What are the differences between the long-run equilibrium of a perfectly competitive firm and the long-run equilibrium of a monopolistically competitive firm? POLSKI. 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. 12 terms. ashryx. 7. Multiple select question. Taxes owed but payable in the following period. For consumers, the bubbles can lead to increased wealth for some individuals who as a result may consume more, save less, buy expensive automobiles, homes, vacations etc. The services are billed to the customers each month. 1.What is meant by allocative efficiency? The Pin_two_years will = $100.00 and i = (0.08) Ptoday will be $96.43. is essentially: The regulatory mechanism of the market system is: The most efficient combination of resources in producing any output is the combination that: Producers would not react because no price or profit signals occurred. Yes, the government should consider subsidizing LoJack purchases. If competitive industry Z is making substantial economic profit, output will: Government ownership of the major industries. A columnist for the Wall Street Journal discussed how some firms were buying existing drilling operations in Canadian oil sands regions. This is a nearly impossible task." 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? A market system allows for the private ownership of resources and coordinates economic activity through market prices. Study with Quizlet and memorize flashcards containing terms like Traditionally, risk has been defined as A) any situation in which the probability of loss is one. This is an example of: C. idea that the decisions of producers must ultimately conform to consumer demands. Increasing a product's use, Finding new customers, Creating a new use situation, Match the example with the correct market ** There was$200 of supplies on hand at the end of the year. In what ways do they differ when a firm is bankrupt? 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, When are they likely to exit? results in allocative efficiency because firms produce where price equals marginal cost. What would the profit-maximizing quantity be if the market price was $5? In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market. What does this statement mean? Also, the Nasdaq is made up of many smaller, newer companies, recently dominated by technology and internet companies, where the DJIA includes 30 of the largest firms in the U.S. Why must caution be employed in comparing stock indexes across countries? By 2017, McDonald's had stopped selling Chicken McNuggets and other products made from chickens fed antibiotics. **17. "Goods and services that are profitable.". As one drinks beer, one also smokes marijuana. The resource markets are where the owners of the resources (the households) sell their resources to the buyers of the resources (businesses). According to the dividend discount model, the current price is equal to the present value of future dividends to be paid on the stock. What are the purposes of the World Trade Organization? Farmer Parker will maximize profits by producing _______bushels of wheat (enter a whole number). Anojan_Thirukumaran5. 12 terms. The dividend-discount model predicts that stock prices: Suppose that the current dividend for a stock is Dtoday, the expected dividend growth rate is r, and the interest rate is i. Therefore, while these small companies don't currently pay dividends, investors may still buy stocks in these companies based on the expectation that they will pay dividends in the future. Also managers and directors may have their own interests in the sense that they prefer to manage a "larger" firm, feeling it increases their own individual influence and power. \end{array} $$ The stockholders, being residual claimants, get what is left after everyone else has been paid. 15 terms. They can enhance their resource productivity. ashryx. specializing in one product and trading for the other. What are the larger implications for economic efficiency? This separation of the two markets could lead to a misallocation of resources. 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? If corporations needed to raise the same amount of capital but did so using fewer shares, the share prices would increase. 5. Suppose the velocity (at 15 feet) of the bullet is 1,000 feet per second. Run-in head What might be the consequences if citizens were not required to serve on a jury? And others focus on the financial statements, where they determine a stock's fundamental value from current assets and estimates of future profitability. No, they will experience neither economic profits nor economic losses in the long run, unless they continually differentiate their products. The hypothesis does not claim that the market price is always right. D. a liability that people are willing to accept in exchange for goods and services., A barter economy is an economy where Based on the information provided in the question, the Dnext_year = $7.50; the Pnext_year = $200; and the i = 0.06. No, it did not achieve allocative efficiency because the marginal benefit was greater than the marginal cost of production. You have a price-weighted index made up of two stocks, A and B. According to the infant industry argument, why should recently established domestic firms be protected from competition from imports? 15 terms. One good thing was that: According to Robert Shiller, a dark-horse candidate for the next speculative bubble is: According to Robert Shiller, speculative bubbles are difficult to predict because: Explain why being a residual claimant can increase the risk from owning stocks. 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. 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. How do property rights encourage cooperation? Record the above transactions in general journal form. **8. Corporations can only deduct net operating losses going back two years and forward 20 years. Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal cost and marginal benefit. Both managerial accounting and fi nancial accounting deal with many of the same economic events. c. Locate inefficiencies in the production process. While the fixed investment in new oil sands projects is prohibitive, variable costs can be in the low $20 range (say, $23) per barrel." The interaction of world supply and demand determines the equilibrium ______. The chief acquired a sample of the data listed below. $$ True or False? Study with Quizlet and memorize flashcards containing terms like 22) Which of the following represents the two views of managerial impact on the success or failure of the organization? Many industries can claim they make contributions to national security and deserve protection. Discuss the inefficiencies that can be caused by stock market bubbles, especially focusing on firms and consumers. Green Summit is trying to differentiate its product to appeal to different consumers. Property rights are the right of the government to own, use, and dispose of resources in an economy. Also (2) the fees for managed funds tend to run about 1.5% a year compared to 0.5% or less for index funds. \text { Starksville } & 17 & 13 \\ She knows the global market offers many opportunities. Which method provides a better measure of a company's economic activity each period? Bobby decides to sell lemonade on a hot summer day. Jacques is planning to set up a $70,000 investment portfolio. 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)? Select four foods that are similar in texture, such as an apple, an onion, a pear, and a potato. Economic resources are also called factors of production because they are used to produce goods and services. c. HR managers need to show how their HR practices support 25 terms. Assume Henderson records adjusting entries only at the end of the year. D. unlimited liability to the owner of the stock., Two characteristics that make owning stock attractive are: A. unlimited liability and first claim on What are the two major differences? Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. b. HR managers are not accountable for planning. The trial balance of Pacilio Security Services Inc. as of January 1, 2015, had the following normal balances: - number of loan clients: over 400000 The columnist estimated that the fixed cost of a new oil sands drilling operation could be $95 per barrel. Fees received but not yet earned. Use a time-series plot to graphically display the currency conversion from the GBP to 1 USD. True or False? Blindfold the participants and ask them to hold their noses. Journalize the adjusting entries needed on December 31 for Henderson Fishing Charters. What explains the success of the convenience stores? In a hypothetical situation, the United States and Mexico have labor forces of the same size. All other things equal, this will lead to a decrease in stock prices. b. Ford Motor Company buys four tires to put on a new Ford Mustang. (a) The unemployment rate is 4.8 percent; (b) the unemployment rate is too high. 1. a horizontal line equal to the minimum point on the typical firm's average total cost curve. yes, because firms produce where the marginal benefit to consumers equals the marginal cost of product. c. The U.S. Air Force purchases two new fighter jets 3. contribute to a more equal distribution of income. How does the problem of limited and bundled choice in the public sector relate to economic efficiency? More specialization in a market economy generally leads to the more efficient use of its resources. It helps create political support for international free trade. \text { Whistler } & 11 & 19 \\ \text{c. change in demand} & \text{h. substitutes}\\ What do critics say is a flaw in the military self-sufficiency argument for protective tariffs to encourage domestic production of goods needed for national security? A bullet, brand unknown, is fired from the FEG P9 $\mathrm{R}$ pistol.

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