In the long run, as firms enter and exit a monopolistically competitive market, productive efficiency may not be reached because economic profits will eventually reach equilibrium.
In the short run, firms may experience economic profits as they differentiate their products and set prices above their marginal costs. However, as new firms enter the market and competition increases, demand for each firm's product will decrease, leading to lower prices and lower profits. Eventually, the price will intersect the average cost curve at a point where price is greater than average cost, but not by a significant margin.
This means that firms will still not be producing at their most efficient level. The strongest firms may survive and the market may morph into an oligopolistic market, where a few large firms dominate and compete on price rather than differentiation. Overall, in the long run, it is unlikely that productive efficiency will be reached in a monopolistically competitive market due to the nature of the market structure.
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The competitive model assumes all of the following except:
A) a large number of buyers
B) easy entry into easy exit from market
C) standardized product
D) patents and copyrights
The competitive model does not include the concept of patents and copyrights . These intellectual property rights create temporary monopolies by granting exclusive rights to inventors and creators, which contradicts the assumptions of a perfectly competitive market. Option (D) is the correct answer.
The competitive model, also known as the perfectly competitive market model, is a fundamental concept in economics that makes several key assumptions. These assumptions include:
A. Large number of buyers and sellers: The model assumes that there are so many buyers and sellers in the market that no individual buyer or seller can influence the market price.
B. Homogeneous products: It assumes that all firms in the market produce identical goods or services, making it impossible for consumers to distinguish between the products of different sellers.
C. Perfect information: Buyers and sellers have complete and accurate information about product prices, quality, and availability, allowing them to make rational decisions.
D. Free entry and exit: Firms can easily enter or exit the market without any barriers, such as high startup costs, government regulations, or exclusive contracts. Option (D) is the correct answer.
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A key dynamic within any Multi-National Corporation(MNC) is cash and foreign exchange risk exposure. Cash managementis critical and also heavily influenced by global dynamics,especially since COVID-19. Within the Caribbean and North American jurisdiction, the economic framework is tightly connected with the major Asian economies of China, the United Kingdom and Japan. The Caribbean and the North American economy have been a barometer of the global economic cycle.
For both Caribbean and North American economies, many Multi-National Corporations have made significant investments to reduce the production cost of goods and diversification benefits. Despite the benefits that could materialize, some North American countries have not been resilient through Global market shocks. Given this context, the following questions require research within the Caribbean context and current market dynamics since COVID-19.
Question:
Explain two benefits of netting. How can a centralized cash management system be beneficial to an MNC located in the Caribbean? (6 Marks)
Netting is a process by which a company consolidates its cash flows from various operations in different currencies to reduce transaction costs, counterparty risk, and foreign exchange exposure.
It is a valuable tool that allows a company to offset payments and receipts in different currencies, resulting in a reduction of the company's foreign exchange exposure.
One benefit of netting is the reduction of transaction costs. Netting allows a company to consolidate its cash flows from various operations in different currencies, reducing the number of transactions required to manage its foreign exchange exposure.
By reducing the number of transactions, a company can reduce its transaction costs and, consequently, increase its profitability.
Another benefit of netting is the reduction of counterparty risk. Netting allows a company to consolidate its cash flows with a single counterparty, reducing the number of counterparties it has to deal with. By reducing the number of counterparties, a company can reduce its counterparty risk, which is the risk that a counterparty will default on its obligations.
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Apple's MacBook has a consistent market share and steady revenue. According to the BCG matrix, the MacBook is a _______ for the company.
According to the BCG matrix, Apple's MacBook, with a consistent market share and steady revenue, would be considered a "cash cow" for the company.
Cash cows are products that have a high market share in a mature, slow-growth industry. They generate a significant amount of cash flow for the company but require little investment to maintain their market share.
The BCG matrix is a tool used by marketers to evaluate a company's portfolio of products or business units. The matrix categorizes products or business units into one of four categories based on their market share and growth rate. These categories include stars, cash cows, question marks, and dogs.
The MacBook has been around for over a decade and has a strong and loyal customer base. The laptop market is relatively mature, and the MacBook's growth rate has slowed down. However, the MacBook continues to generate significant revenue for Apple and requires little investment to maintain its market share. As a cash cow, the MacBook can be used to support other products in Apple's portfolio, such as the iPhone and iPad, which are in higher growth industries.
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26. Analytical procedures are required at the planning stage of all audits and as: A. Tests of internal control. B. Substantive procedures. C. A part of the final overall review. D. Computer generated procedures.
Analytical procedures are required at the planning stage of all audits and as a part of the substantive procedures (option b).
Analytical procedures involve the evaluation of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures help auditors to identify areas that may require further audit attention and to assess the risk of material misstatement.
During the planning stage, auditors use analytical procedures to gain an understanding of the client's business and industry, identify areas of potential risk, and develop an initial assessment of materiality. As part of substantive procedures, analytical procedures are used to obtain audit evidence about the completeness, accuracy, and validity of the financial statements.
While analytical procedures may be used as part of the final overall review, they are primarily used during the planning stage and as part of substantive procedures to obtain sufficient and appropriate audit evidence to support the auditor's opinion. Computer-generated procedures are a specific type of analytical procedure that involves the use of software to analyze data and identify potential issues.
Option b is answer.
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Problem 3: Consider the following simple model for the random evolution of a stock price for a certain stock (lets call it stock A). Each day, the stock price increases by $1 with probability r = 0.17, moves down $1 with probability p = 0.15, or remains the same with probability 9 = 1-p-r. Today (day zero), the stock price is $13. Stock price of $0 is an absorbing state; once the stock price hits zero, it remains there forever (out of business etc.), Consider the following trading strategy: we hold on to the stock until its price becomes $35, at which point we sell. (a) Draw a transition diagram of the process. You can draw this for the first three and last three states, and leave ... in between. Is this stochastic process irreducible? Explain your answer. (10 Points)
There is a non-zero probability that any state will change into another, the process is irreducible.
With states acting as nodes and transition probabilities acting as edges, the transition diagram for the given stochastic process can be visualised as a directed graph. The first three states are priced at $13, $14, and $12, and the final three are priced at $34, $35, and $0. For a price of 13, there are two possible changes: to $12 with a probability of 0.15 and to $14 with a probability of 0.17. Likewise, there are three possible transitions for a value of $14: to $13 with probability 0.09, to $15 with probability 0.17, and to $13 with probability 0.15. A transition from $12 to either $11 or $13 with a probability of 0.15 or 0.17 is conceivable. Because there is a non-zero probability that any state will change into another, the process is irreducible.
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Assume the economy is not at the long-run equilibrium, and a proposed solution is to increase government spending to help the economy get back on track. Imagine the government needs to target an increase in rGDP of $1000 to bridge the gap, and so the government borrows money to spend enough such that rGDP increases by $1000 in the short run. Simultaneously, because interest rates are driven upward by increased government borrowing, investment spending drops such that there is a decrease in rGDP by $300 Which of the following best describes the scenario above? O Zero crowding out O Incomplete crowding out O Complete crowding out
The scenario described above is an example of incomplete crowding out.
Incomplete crowding out occurs when government spending increases, but only a portion of the increase in government borrowing is offset by a decrease in private investment spending. In this scenario, the government increases its spending to bridge the gap and stimulate the economy. However, this leads to an increase in interest rates, which causes a decrease in private investment spending.
As a result, the overall effect on rGDP is less than the government's targeted increase. This scenario is an example of incomplete crowding out because some of the increase in government spending is offset by a decrease in private investment spending, but not all of it. In complete crowding out, the increase in government spending is fully offset by a decrease in private investment spending, resulting in no net increase in rGDP.
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Suppose a tax of $0.50 per unit on a good creates a deadweight loss of $100. If the tax is increased to $2.50 per unit, the deadweight loss from the new tax would be
The deadweight loss of a tax is a measure of the efficiency loss that occurs when a tax is imposed on a market.
It represents the value of the foregone gains from trade that result from the distortion of market incentives created by the tax.
In this scenario, we are told that a tax of $0.50 per unit on a good creates a deadweight loss of $100.
This means that the tax is causing the market to allocate goods in a way that is less efficient than it would be without the tax, resulting in a net loss of $100 to society.
If the tax is increased to $2.50 per unit, we would expect the deadweight loss to increase as well.
This is because a higher tax rate will create a greater distortion of market incentives and lead to an even less efficient allocation of goods.
In general, we would expect the deadweight loss to increase as the tax rate increases, but the precise relationship between the two will depend on the specific details of the market.
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Within the BCG matrix, which type of product most likely falls under the category known as question marks?
Products that have a small market share in a high-growth industry are known as question marks within the BCG matrix.
Question marks, also known as problem children, are products or business units with a small market share in a high-growth market. They require substantial investment to increase their market share and gain a competitive advantage. Because they operate in a growing market, there is potential for substantial growth in the future, but their future is uncertain.
These products typically require a lot of resources and investments to increase their market share and become stars, or they may be divested if they cannot achieve growth. Companies need to carefully evaluate and manage question marks to determine their potential for growth and profitability in order to make the best strategic decisions.
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assume that in 2018, the first edition of a comic book was sold at auction for $786,000. the comic book was originally sold in 1939 for $.05. for this to have been true, what was the annual increase in the value of the comic book? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The annual increase in the value of the comic book is approximately 27.99%.
To calculate the annual increase in the value of the comic book, we need to use the formula for compound interest:
[tex]Final Value = Initial Value × (1 + Annual Interest Rate)^Number of Years[/tex]
We know that the initial value of the comic book was $0.05 and the final value was $786,000. We also know that the number of years between 1939 and 2018 is 79. So we can plug these values into the formula and solve for the annual interest rate:
$786,000 = [tex]$0.05 × (1 + Annual Interest Rate)^79[/tex]
Dividing both sides by $0.05, we get:
15,720,000 = (1 + Annual Interest Rate)^79
Taking the 79th root of both sides, we get:
1 + Annual Interest Rate = (15,720,000)^(1/79)
Subtracting 1 from both sides, we get:
Annual Interest Rate = (15,720,000)^(1/79) - 1
Using a calculator, we find that the annual interest rate is approximately 27.99%. Therefore, the annual increase in the value of the comic book was about 27.99%.
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If the reserve requirement is 10 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $500, it _____
a. must increase required reserves by $50. b. will initially see reserves increase by $500. c. will be able to use this deposit to make new loans amounting to $450. d. All of the above are correct.
If the reserve requirement is 10 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $500, it will initially see reserves increase by $500.
Hence, the correct option is b.
When a bank receives a new deposit of $500 and the reserve requirement is 10%, the bank will initially see its reserves increase by the full amount of the deposit, which is $500.
The reserve requirement is the percentage of deposits that a bank must hold as reserves and cannot lend out. In this case, with a reserve requirement of 10%, the bank must hold $50 ($500 x 0.10) as required reserves.
Since the bank desires to hold no excess reserves, it will not keep any reserves above the required amount. Therefore, it will be able to use the remaining $450 ($500 - $50) to make new loans.
Option a is incorrect because the bank does not need to increase its required reserves by $50; rather, it must hold $50 of the new deposit as required reserves. Option c is also incorrect because the bank can make new loans of $450, not $500.
Hence, the correct option is b.
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Your answer: d. All of the above are correct. When a bank receives a new deposit of $500 and the reserve requirement is 10%, it must increase required reserves by $50 (a), will initially see reserves increase by $500 (b), and will be able to use this deposit to make new loans amounting to $450 (c).
Reserve increase refers to the process of adding funds or assets to a reserve account or fund. Reserves are set aside by businesses, governments, or financial institutions to provide a buffer against unexpected events or to support ongoing operations. An increase in reserves can occur due to a variety of reasons, such as a surplus of income, a reduction in expenses, or an infusion of capital. The increase in reserves can be used to support future growth, invest in new projects, or provide a safety net for unexpected events. In the context of financial institutions, an increase in reserves may also be required by regulators as part of risk management requirements.
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Grand Styles Furniture Store sells very fashionable furniture from high-end (prestigious) designers. This furniture is priced much higher than other furniture sold in the market. Is the Grand Styles Furniture Store using Value-Added Pricing? Please explain your answer using no more than 2 bullet points. 1 mark for the correct explanation.
Yes, Grand Styles Furniture Store is using value-added pricing.
Value-added pricing is a strategy where a company adds value to their product or service and then prices it higher than similar products in the market.
Grand Styles Furniture Store is selling fashionable furniture from prestigious designers, which adds value to the product and justifies the higher price point. The fashionable and exclusive nature of the furniture differentiates it from other market options, creating additional value for customers willing to pay a premium
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what can employees do to improve the leader-employee relationship? question 12 options: decrease empowerment demands. seek feedback to improve their performance. increase organizational expectations. resist engaging in political behaviors.
By soliciting feedback to enhance their work, employees may strengthen the relationship between leaders and subordinates.
Employees can improve the leader-employee relationship by seeking feedback to improve their performance. This means actively asking their leaders for constructive criticism and using it to better themselves. Additionally, employees should work to meet or exceed the expectations set by their organization, as this shows dedication and commitment to their job. It is not recommended to decrease empowerment demands or engage in political behaviors, as these actions can harm the relationship and overall performance.
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the lmk company is planning a $64 million expansion. the expansion is to be financed by selling $25.6 million in new debt and $38.4 million in new common stock. the before-tax required rate of return on debt is 9 percent and the required rate of return on equity is 14 percent. if the company is in the 35 percent tax bracket, what is the firm's cost of capital?
The LMK Company's cost of capital is 8.88%.
To calculate the cost of capital for the LMK Company, we need to first determine the weight of debt and equity in the financing mix. We can do this using the following formulas:
Weight of Debt = Total Debt / Total Financing
Weight of Equity = Total Equity / Total Financing
Total Financing = Total Debt + Total Equity
Using the information given in the question, we can calculate the weight of debt and equity as follows:
Total Debt = $25.6 million
Total Equity = $38.4 million
Total Financing = $25.6 million + $38.4 million = $64 million
Weight of Debt = $25.6 million / $64 million = 0.4
Weight of Equity = $38.4 million / $64 million = 0.6
Next, we can use the weights of debt and equity to calculate the after-tax cost of debt and the cost of equity, and then use these values to calculate the weighted average cost of capital (WACC).
After-Tax Cost of Debt = Before-Tax Cost of Debt x (1 - Tax Rate)
After-Tax Cost of Debt = 0.09 x (1 - 0.35) = 0.0585 or 5.85%
Cost of Equity = 0.14 or 14%
WACC = (Weight of Debt x After-Tax Cost of Debt) + (Weight of Equity x Cost of Equity)
WACC = (0.4 x 0.0585) + (0.6 x 0.14) = 0.0888 or 8.88%.
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Consumer loans, like open account credits, result from a rather informal process.a. Trueb. False
The statement "Consumer loans, like open account credits, result from a rather informal process" is partially true. While open account credits are indeed informal, consumer loans may or may not be informal depending on the type of loan and the lender.
Consumer loans are typically used for personal purposes such as buying a car, paying for education, or home improvements. These loans can be obtained from various sources such as banks, credit unions, and online lenders. The process of obtaining a consumer loan typically involves filling out an application, providing proof of income and creditworthiness, and agreeing to the terms and conditions of the loan.
While some consumer loans may have an informal process, such as payday loans or personal loans from friends and family, others require a more formal process. For example, getting a mortgage or a car loan typically involves a more rigorous application process and may require collateral.On the other hand, open account credits are informal and do not involve a formal application process.
They are typically offered by retailers and allow customers to purchase goods and services on credit without having to go through a loan application process.In conclusion, while open account credits are informal, consumer loans can be either formal or informal depending on the type of loan and the lender.
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1. Consider a 4-years to maturity Coupon bond with Face Value = $1000 and a 5% coupon rate. This bond was issued in 2021 and is currently (in 2022) selling at $990. a) Is the yield to maturity in 2022 on this bond higher, lower, or equal to 5%? Why? Explain very briefly. b) Suppose that next year (2023) interest rates are expected to FALL; specifically, interest rate on this bond is expected to FALL to 4%. What is the expected price of this bond equal to (i.e. what is the expected 2023 price of this bond)? Solve for the value (#); show ALL your work.
The expected 2023 price of this bond is approximately $1036.57.
a) The yield to maturity (YTM) in 2022 for this bond is higher than 5%. This is because the bond is currently selling at a discount ($990, which is less than the face value of $1000). When the bond price is lower than the face value, the yield to maturity will be higher than the coupon rate to compensate investors for purchasing the bond at a discount.
b) If interest rates are expected to fall to 4% in 2023, the expected price of the bond will increase. To calculate the expected 2023 price, we can use the present value formula:
Bond Price = (C / (1 + r)^1) + (C / (1 + r)^2) + (C / (1 + r)^3) + ((FV + C) / (1 + r)^4)
Where:
C = coupon payment ($1000 * 5% = $50)
FV = face value ($1000)
r = new interest rate (4% or 0.04)
Bond Price = ($50 / (1 + 0.04)^1) + ($50 / (1 + 0.04)^2) + ($50 / (1 + 0.04)^3) + (($1000 + $50) / (1 + 0.04)^4)
Bond Price ≈ $50(0.9615 + 0.9246 + 0.8890) + $1050(0.8553)
Bond Price ≈ $48.07 + $46.23 + $44.45 + $897.82
Bond Price ≈ $1036.57
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Consider the effect of an un-anticipated 1 basis point increase in the 5 year bond rate (xt) at time t, which persists at t+1, t+2, ... Assuming the 2 year bond rate (24) does not change, and no other shocks occur at any horizon, what is the most appropriate inference regarding the change in the 10 year bond rate ('t) in the long run (i.e., infinite horizon)? O a. The 10 year bond rate increases by 1.34 in the long-run. O b. The long-run change in the 10 year bond rate is between 1.2263 and 1.4537 with 95% confidence. OC. The 10 year bond rate is not significantly affected by the increase in the 5 year bond rate. Od. The effect cannot be computed because the data is not stationary.
The most appropriate inference regarding the change in the 10 year bond rate in the long run, assuming an un-anticipated 1 basis point increase in the 5 year bond rate (xt) at time t, which persists at t+1, t+2, ...
And assuming the 2 year bond rate (24) does not change, and no other shocks occur at any horizon, is option b: The long-run change in the 10 year bond rate is between 1.2263 and 1.4537 with 95% confidence with interference. This is because the effect of the increase in the 5 year bond rate on the 10 year bond rate cannot be determined with certainty, and there is a range of possible outcomes with a certain level of confidence. It is not possible to provide a definite value or range, like in options a and b, without additional information or assumptions about the relationship between the bond rates.
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What is a device that allows its holder to buy goods based on a promise to pay
A device that allows its holder to buy goods based on a promise to pay is called a credit card.
What's credit card?A credit card is issued by a financial institution, such as a bank, and grants the cardholder a line of credit. This enables the cardholder to purchase goods or services without immediate payment, as long as they stay within their credit limit.
The financial institution later bills the cardholder for the purchases, typically on a monthly basis, and the cardholder can choose to pay the balance in full or in installments, often with interest charged on the outstanding balance.
Credit cards provide convenience, financial flexibility, and can help build a positive credit history when used responsibly.
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and are working for Agriculture and Agri-Food Canada. Your boss asks you to determine the impact of Korean tariff reductions on beef exported from Canada to Korea. Prior to the signing of CKFTA, the K orean tariff on imported beef from Canada was C$2.70 per kilogram. After CKFTA is fully implemented, the tariff will be eliminated by 2029. Based on research at the University of Guelph, you know the following supply and demand information for Canada and Korea (these supply and demand curves assume all other trade is held fixed): Canada Korea Demand QP - 1775 - 102*pc QP-528-20*PK Supply 09-593 +52*p 0-67 +24*PK Where Qºis demand in the respective country, Q is supply in the respective country, PC is the price of beef in Canada, and PK is the price of beef in Korea. To simplify the analysis, assume all prices are in Canadian dollars. You also know that the equilibrium with the initial tariff of C$2.70 per kilogram is as follows: Price of beef (C$/kg) Demand ('000 of tonnes) Supply ('000 of tonnes) Exports to Korea ('000 tonnes) Imports from Canada ('000 tonnes) Canada $7.74 989.81 993.29 3.49 Korea $10.44 320.04 316.55 3.49 Showing your work, answer the following questions. Note that these questions are designed to take you through calculating the new equilibrium prices, quantities supplied, quantities demanded, and trade under the CKFTA liberalization scenario (i.e, assuming the tariff falls to C$0.00 per kilogram) a. (3 marks) Derive Canada's excess supply curve b. (3 marks) Derive Korea's excess demand curve stated in terms of the price of beef in Korea C. (3 marks) Now solve for the equilibrium price of beef in Canada with the eliminated tariff d. (6 marks) Now solve for the equilibrium quantity demanded and supplied in Canada, and equilibrium quantity exported from Canada to Korea e. (2 marks) Now solve for the equilibrium price of beef in Korea f. (6 marks) Now solve for the equilibrium quantity demanded and supplied in Korea, and equilibrium quantity of beef imported from Canada
a. Canada’s Excess Supply = -1182 + 154PC, b. Korea’s Excess Demand = 461 - 44PK, c. Therefore, the equilibrium price of beef in Canada with the eliminated tariff is $13.24 per kilogram. d,e. Therefore, the equilibrium quantity exported from Canada to Korea is 1,061.88 tonnes. f. 72PK + 65.
a. Canada’s Free Trade Agreement excess supply is given by QS - QD, which is (593 + 52PC) - (1775 - 102PC). Simplifying this expression, we get:
Canada’s Excess Supply = -1182 + 154PC
b. Korea’s excess demand is given by QD - QS, which is (528 - 20PK) - (67 + 24PK). Simplifying this expression, we get:
Korea’s Excess Demand = 461 - 44PK
c. With the eliminated tariff, the price of beef in Canada will be equal to the price of beef in Korea. Therefore, setting PC = PK and solving for PC, we get:
7.74 + 0.102PC = 10.44 - 0.042PK
0.102PC + 0.042PK = 2.7
PC + PK = 26.47
Substituting PK = PC in the above equation, we get:
2PC = 26.47
PC = 13.24
Therefore, the equilibrium price of beef in Canada with the eliminated tariff is $13.24 per kilogram.
d. To solve for the equilibrium quantity demanded and supplied in Canada, we substitute PC = $13.24 in the demand and supply functions for Canada. This gives:
QD = 1775 - 102(13.24) = 569.48
QS = 593 + 52(13.24) = 1250.48
Therefore, the equilibrium quantity demanded and supplied in Canada is 569,480 tonnes and 1,250,480 tonnes, respectively. The equilibrium quantity exported from Canada to Korea is the difference between the quantity demanded by Korea and the quantity supplied by Canada at this price, which is:
Exports to Korea = QD(Korea) - QS(Canada) = (528 - 20PK) - (593 + 52PC) = (528 - 20PK) - (593 + 52PK) = -65 - 72PK
Substituting PK = $13.24, we get:
Exports to Korea = -65 - 72(13.24) = -1,061.88
Therefore, the equilibrium quantity exported from Canada to Korea is 1,061.88 tonnes.
e. With PC = PK = $13.24, we can use the demand and supply functions for Korea to find the equilibrium price of beef in Korea. This gives:
QD = 528 - 20PK = 528 - 20(13.24) = 265.6
QS = 67 + 24PK = 67 + 24(13.24) = 391.76
Therefore, the equilibrium price of beef in Korea is $13.24 per kilogram.
f. To solve for the equilibrium quantity demanded and supplied in Korea, we substitute PK = $13.24 in the demand and supply functions for Korea. This gives:
QD = 528 - 20(13.24) = 265.6
QS = 67 + 24(13.24) = 391.76
Therefore, the equilibrium quantity demanded and supplied in Korea is 265,600 tonnes and 391,760 tonnes, respectively. The equilibrium quantity of beef imported from Canada is the difference between the quantity supplied by Canada and the quantity demanded by Korea at this price, which is:
Imports from Canada = QS(Canada) - QD(Korea)
= (593 + 52PC) - (528 - 20PK)
= (593 + 52PK) - (528 - 20PK)
= 72PK + 65
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Correct Question:
The Canada-Korea Free Trade Agreement (CKFTA) is a bilateral trade agreement seeking to lower barriers to trade between Canada and South Korea. Prior to the signing of CKFTA, the Korean tariff on imported beef from Canada was C$2.70 per kilogram. After CKFTA is fully implemented, the tariff will be eliminated by 2029.
Based on research at the University of Guelph, you know the following supply and demand information for Canada and Korea (these supply and demand curves assume all other trade is held fixed):
Canada Korea
Demand QD = 1775 – 102*PC QD = 528 – 20*PK
Supply QS= 593 + 52*PC QS= 67 + 24*PK
Where QD is demand in the respective country, QS is supply in the respective country, PC is
the price of beef in Canada, and PK is the price of beef in Korea. To simplify the analysis,
assume all prices are in Canadian dollars.
You also know that the equilibrium with the initial tariff of C$2.70 per kilogram is as follows:
Canada Korea
Price of beef (C$/kg) $7.74 $10.44
Demand (‘000 of tonnes) 989.81 320.04
Supply (‘000 of tonnes) 993.29 316.55
Exports to Korea (‘000 tonnes) 3.49
Imports from Canada (‘000 tonnes) 3.49
Showing your work, answer the following questions. Note that these questions are designed to
take you through calculating the new equilibrium prices, quantities supplied, quantities
demanded, and trade under the CKFTA liberalization scenario (i.e. assuming the tariff falls to
C$0.00 per kilogram)
a. (3 marks) Derive Canada’s excess supply curve
b. (3 marks) Derive Korea’s excess demand curve stated in terms of the price of beef in Korea
c. (3 marks) Now solve for the equilibrium price of beef in Canada with the eliminated tariff
d. (6 marks) Now solve for the equilibrium quantity demanded and supplied in Canada, and equilibrium quantity exported from Canada to Korea
e. (2 marks) Now solve for the equilibrium price of beef in Korea
f. (6 marks) Now solve for the equilibrium quantity demanded and supplied in Korea, and equilibrium quantity of beef imported from Canada
51. An independent auditor finds that the Simmer Corporation occupies office space, at no charge, in an office building owned by a shareholder. This finding indicates the existence of: A. Management fraud. B. Related party transactions. C. Window dressing. D. Weak internal control.
The independent auditor's finding that the Simmer Corporation occupies office space in a building owned by a shareholder is an indication of the existence of related party transactions.The correct option is B.
Related party transactions refer to financial transactions that occur between two parties who have a close relationship or connection with each other, such as family members, business partners, or entities with common ownership.
In this case, the Simmer Corporation and the shareholder who owns the office building have a close relationship, and as a result, the rental arrangement may not be at arm's length. The rental arrangement could be advantageous to the Simmer Corporation as it is receiving office space at no charge, and the shareholder could also benefit as it can be used as a tax deduction.
Related party transactions can raise concerns about the integrity of financial reporting and can lead to conflicts of interest.
Therefore, it is important for companies to have strong internal controls and for auditors to thoroughly investigate any related party transactions to ensure that they are disclosed appropriately in financial statements and are conducted at arm's length.
The correct option is B.
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Assume that we have a fixed supply of a depletable resource to allocate between two periods. Assume further that the demand function is constant in the two periods, the marginal willingness to pay is given by the formula P = 11 - 0.4q, and marginal cost is constant at $4 per unit. The total supply is 2 units. What percent of the total should be consumed during the first period if the discount rate is 3%?
Static and dynamic efficiency
Because it does not account for the potential for future changes in demand or technical advancements that can raise the value of the resource in the future, it is not dynamically efficient.
To determine the optimal allocation of the depletable resource, we can use the Hotelling rule, which states that the optimal rate of extraction should equal the discount rate plus the rate of natural resource depletion. In this case, the resource is being allocated between two periods, so we need to consider the rate of depletion over both periods.
The rate of depletion can be calculated as the difference between the total supply and the remaining amount at the end of the first period, divided by the total time (two periods). Using the given information, the total supply is 2 units, and if x represents the amount consumed during the first period, then the remaining amount at the end of the first period is 2 - x. Therefore, the rate of depletion is (2 - x)/2.
The discount rate is given as 3%, so the optimal rate of extraction is 0.03 + (2 - x)/2 = 0.03 + 1 - x/2.
To find the optimal allocation of the resource between the two periods, we need to set the marginal cost equal to the optimal rate of extraction. The marginal cost is constant at $4 per unit, so we have:
4 = 0.03 + 1 - x/2
Solving for x, we get:
x = 1.94
Therefore, approximately 97% of the total should be consumed during the first period, and 3% should be left for the second period.
In terms of efficiency, this allocation is static efficient because it maximizes the net present value of the resource rent (i.e. the difference between the price and the marginal cost) over the two periods, given the constant demand function. However, it is not dynamically efficient because it does not take into account the possibility of future technological improvements or changes in demand that could increase the value of the resource in the future.
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According to the subtantialist definition of economics (W)
a. it cannot be said that the needs are unlimited en b. scarcity of resources and limited needs vary according to different historical social conditions c. individuals always act in their own interests d. resources are not always scarce.
(b) scarcity of resources and limited needs vary according to different historical social conditions.
According to the substantialist definition of economics, the fundamental problem of economics is scarcity, which means that there are limited resources available to meet unlimited human needs and wants.
However, the extent of scarcity and the nature of human needs vary depending on historical and social conditions. This is in contrast to the neoclassical definition of economics, which assumes that individuals always act in their own self-interest and that resources are always scarce.
The substantialist definition of economics emphasizes the historical and social context in which economic activities take place. It recognizes that the nature of human needs and wants is not constant but varies according to different historical and social conditions.
For example, the needs and wants of people in a capitalist society are different from those in a socialist or feudal society.
Similarly, the extent of scarcity of resources also varies depending on the historical and social conditions. For instance, in a subsistence economy, resources may be abundant, while in a developed economy, resources may be scarce.
Therefore, the substantialist definition of economics recognizes that the problem of scarcity is not absolute but relative, and it varies according to different historical and social conditions.
This definition highlights the importance of understanding the social and historical context in which economic activities take place.
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The European Union (EU) is an example of a ____O customs union O free trade area O multilateral trade negotiation
The European Union (EU) is an example of a customs union.
A customs union is a type of trade agreement where member countries agree to eliminate internal tariffs and establish a common external tariff on goods imported from non-member countries. In a customs union, countries also agree to coordinate and harmonize their trade policies, including regulations and standards. The EU, which currently has 27 member states, is a customs union that was established in 1957 with the signing of the Treaty of Rome.
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The experiments surrounding the French Paradox proved that resveratrol was the active ingredient in red wine that countered atherosclerosis.
While red wine has been associated with a lower risk of heart disease, the experiments surrounding the French Paradox did not prove that resveratrol was the active ingredient in red wine that countered atherosclerosis, thus the statement is false.
While red wine consumption may have some potential health benefits, the role of specific compounds such as resveratrol in countering atherosclerosis is still an area of ongoing research and debate.
The French Paradox refers to the observation that the French have a lower incidence of heart disease despite a diet high in saturated fats. One hypothesis was that the consumption of red wine, which is also a common part of the French diet, was responsible for this effect.
Resveratrol is a polyphenolic compound found in red wine that has been associated with potential health benefits, including anti-inflammatory and antioxidant properties. However, studies examining the effects of resveratrol on atherosclerosis have had mixed results, with some suggesting a potential protective effect and others showing no significant effect.
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The complete question is:
"The experiments surrounding the French Paradox proved that resveratrol was the active ingredient in red wine that countered atherosclerosis. State true or false."
A study of the time spent shopping in a supermarket for a market basket of 20 specific items showed an approximately uniform distribution between 20 minutes and 40 minutes. What is the probability that the shopping time will be a. between 25 and 30 minutes? b. less than 35 minutes? c. What are the mean and standard deviation of the shopping time?
a. To find the probability that the shopping time is between 25 and 30 minutes, we need to find the area under the uniform distribution curve between those two values.
The uniform distribution has a constant probability density function between the minimum and maximum values, so the area under the curve between 20 and 40 minutes is 1. The area under the curve between 25 and 30 minutes is (30-25)/(40-20) = 0.25, since that's the fraction of the total range that falls between those two values. Therefore, the probability that the shopping time is between 25 and 30 minutes is 0.25.
b. To find the probability that the shopping time is less than 35 minutes, we need to find the area under the curve up to that value. Again, since the uniform distribution has a constant probability density function, we can find the area by taking the fraction of the total range that falls below 35 minutes. That fraction is (35-20)/(40-20) = 0.75, so the probability that the shopping time is less than 35 minutes is 0.75.
c. The mean of a uniform distribution is the average of the minimum and maximum values, so the mean shopping time is (20+40)/2 = 30 minutes. The standard deviation of a uniform distribution is given by the formula (b-a)/sqrt(12), where a is the minimum value and b is the maximum value. In this case, the standard deviation is (40-20)/sqrt(12) = 3.08 minutes.\
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Consider a government that collects tax on wages received by workers to provide public goods. This tax creates a wedge/difference between the wages paid by the firms and wages received by the workers. The tax revenue is equal to the product of the tax rate and the quantity of workers hired. There is no corruption or political pressure on how much of the public good the government produces.
Suppose the labour supply equation is given by w = 10+0.25L and the labour demand curve is fixed at 150 units. If the tax rate is $10 per unit, calculate the tax revenue to be collected by the government. How many workers are hired before and after-tax is imposed? Show your steps. (3 marks).
Now suppose, with the same labour supply equation, the labour demand equation is given by the following: w= 150-0.1L. If the tax rate is $10 per unit, calculate the tax revenue to be collected by the government. Calculate and compare the number of workers hired before and after-tax is imposed. Show your steps. (3 marks).
Between a and b, in which scenario labour supply is relatively more elastic? Comparing the answers for parts a and b, how is the elasticity of the supply of labour related to the tax revenue collection? (1 mark).
If the public good created out of tax revenue contributes to the infrastructure of the economy showing an improvement of government quality per person (g(y)) and give your answer in part (b) regarding the impact on the number of workers hired after-tax (affecting the GDP per capita of the economy) – show the impact on steady-state level of y and g using a well-labelled graph on y-g space (from Chapter 12). Your graph must show and explain the correct shift (s) and the final point of steady state. (3 marks).
Part A:
The tax revenue to be collected by the government is calculated by multiplying the tax rate with the quantity of workers hired. Since the labour demand curve is fixed at 150 units, the number of workers hired before tax is 150. Therefore, the tax revenue collected by the government is $1500 (10 x 150).
Part B:
The tax revenue to be collected by the government is calculated by multiplying the tax rate with the quantity of workers hired. With the labour demand equation given by w= 150-0.1L, the number of workers hired before tax is 140. Therefore, the tax revenue collected by the government is $1400 (10 x 140). The number of workers hired after tax is 120, which is 20 less than before tax.
Between part A and B, in part B labour supply is relatively more elastic since the number of workers hired decreases more when the tax rate increases. The elasticity of the supply of labour is inversely related to the tax revenue collection. A higher elasticity leads to a lower tax revenue.
The increase in the tax rate resulting from part B leads to a decrease in the number of workers hired, which in turn affects the GDP per capita of the economy. The impact of the tax on the steady-state level of y and g can be seen in the graph. The graph shows that the increase in tax rate shifts the steady-state level of y and g downwards from point A to point B, leading to a reduction in GDP per capita.
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an unexpected import restriction imposed on mangoes by the usda part 2 a. will reduce the price of mangoes in the united states. b. will increase the price of mangoes in the united states. c. will discourage american producers of mangoes. d. will reduce the price of mango juice in the united states.
B. The USDA's surprise import limit on mangoes would push up the cost of mangoes in the country.
B. The unexpected import restriction imposed on mangoes by the USDA will increase the price of mangoes in the United States. This is because the restriction will limit the supply of mangoes available in the US market, leading to an increase in prices due to higher demand. The restriction may also discourage American producers of mangoes as they may find it difficult to compete with the restricted foreign imports. However, it is unlikely to have a direct impact on the price of mango juice in the United States as juice is often made from a variety of fruits and not solely from mangoes.
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evaluate the current situation of Turkey's agriculturaleconomics sector
The current situation of Turkey's agricultural economics sector is complex and dynamic, with both challenges and opportunities for growth and development.
The current situation of Turkey's agricultural economics sector is complex and multifaceted. On one hand, Turkey has a long history of agriculture and is known for producing a diverse range of crops, including wheat, corn, barley, cotton, and fruits and vegetables. However, the sector has faced numerous challenges in recent years, including climate change, drought, water scarcity, and a lack of investment in infrastructure and technology.
In addition, the sector has also been impacted by political and economic factors, including currency devaluation, inflation, and trade disputes. These challenges have led to a decline in agricultural productivity, and many small-scale farmers have struggled to compete in a globalized market.
Despite these challenges, there are also opportunities for growth and development in the sector. The Turkish government has implemented policies aimed at supporting small-scale farmers and promoting sustainable agriculture practices. Additionally, there is growing interest in organic and specialty crops, which could provide new avenues for economic growth.
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in addition to accelerating deductions, the timing strategy of ______ income recognition is beneficial to many taxpayers.
In addition to accelerating deductions, the timing strategy of deferring income recognition is also beneficial to many taxpayers.
This strategy involves delaying the receipt of income until a later tax year, thereby reducing the amount of taxable income for the current year.
Deferring income recognition is particularly useful for individuals who expect to be in a lower tax bracket in the future, as it allows them to pay a lower amount of taxes on the income.
Furthermore, deferring income recognition can also help taxpayers who are nearing retirement age. By deferring income until after they retire, individuals can potentially reduce their taxable income and avoid paying taxes on Social Security benefits.
Additionally, deferring income can allow individuals to take advantage of certain tax credits and deductions that are only available in certain tax years.
Overall, the timing strategy of deferring income recognition can be a useful tool for taxpayers looking to reduce their tax liability.
However, it is important to note that deferring income can have potential drawbacks, such as the possibility of a higher tax rate in the future or the risk of missing out on potential investment opportunities.
Therefore, it is important for individuals to carefully consider their financial situation and consult with a tax professional before implementing this strategy.
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sanchez foods inc. is a large food manufacturing corporation that earns more profits than its competitors. the company uses only organically grown grains and fruits. it also promotes organic farming and helps nonprofit agencies that focus on food and nutrition causes. the company recently decided to use a third-party recycling logo. in this scenario, sanchez foods is most likely to have adopted the practice of . group of answer choices green marketing event marketing relationship marketing affinity marketing
Sanchez Foods Inc. is most likely to have adopted the practice of green marketing by using a third-party recycling logo to promote their use of organically grown grains and fruits and their commitment to promoting organic farming and supporting nonprofit agencies focused on food and nutrition causes.
Sanchez Foods Inc., a large food manufacturing corporation, is most likely to have adopted the practice of green marketing. The company uses organically grown grains and fruits, promotes organic farming, and supports nonprofit agencies focused on food and nutrition causes.
Additionally, they recently decided to use a third-party recycling logo. All these actions align with green marketing strategies, which emphasize environmental sustainability and responsible business practices.
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The states that more stringent environmental regulations can increase a firm's efficiency and enhance their market competitiveness. a. aggregate emissions function O b. guy on the corner O C. First Theorem of Welfare Economics O d. Porter Hypothesis
The correct answer is d. Porter Hypothesis. The Porter Hypothesis suggests that more stringent environmental regulations can actually lead to increased efficiency and competitiveness for firms, as they are forced to innovate and find more sustainable and efficient ways of operating.
This hypothesis is based on the idea that a cleaner environment can lead to increased productivity and improved public health, which in turn can lead to greater economic growth and welfare. This concept is related to the broader field of Welfare Economics, which studies how policies and regulations can impact overall social welfare and economic well-being.
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