Answer:
C, The unsold additions to inventory at an appliances store.
Explanation:
GDP = Gross DOMESTIC Product
Since the unsold additions are not sold, there's no money coming from it, thus it is not counted in GDP.
Bonus: If you order clothes from Thailand, that is called GNP. It counts as Thailand's GDP because the money is going into the country, and it counts as America's GNP as you are buying goods from another country.
Suppose the market for pizzas is unregulated. That is, pizza prices are free to adjust based on the forces of supply and demand.
If a shortage exists in the pizza market, then the current price must be.............than the equilibrium price. For the market to reach equilibrium, you would expect................
Answer:
Lower
Buyers would offer higher prices
Explanation:
When a shortage occurs when Demand exceeds supply. Excess demand occurs when price is below equilibrium price and as a result suppliers reduce quantity supplied.
As a result of the shortage, buyers would offer higher prices. As a result of the higher prices, the quantity supplied would increase and equilibrium would be restored.
I hope my answer helps you
Categories the following into Market economy and Non-market economy.
1. Prices are set by government agencies.
2. The invisible hand guides resources to their highest valued uses
3. Buyers and sellers are motivated by government directives.
4. Prices are set by supply and demand
5. Buyers and sellers are motivated by a sense of communal well- being.
6. Buyers and sellers are motivated by self-interest.
Answer:
Market economy:
2. The invisible hand guides resources to their highest valued uses
4. Prices are sey by supply and demand
6. Buyers and sellers are motivated by self-interest
Non-market economy:
1. Prices are set by government agencies
3. Buyers and sellers are motivated by government directives
5. Buyers and sellers are motivated by a sense of communal well-being
Explanation:
On the one hand, the concept of market economy refers to a type of economy system that basically indicates that the market will find the equilibrium and work properly without the help of the government and therefore it establishes that the economy does not need from the figure of the government and that this last one must worry only about the other issues that do not include the economy.
On the other hand, a non-market economy like its name indicates, it refers to the type of system that do consider that the presence of the government is very important for the correct system of the economy and all of its factors regarding the market. Therefore that this type of system approves the planning of the economy from the government without discussions.
Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $20,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 30 percent this year and will be 33 percent next year, and that he can earn an after-tax rate of return of 12 percent on his investments.a. What is the after-tax income if Hank sends his client the bill in December?After- tax income ?b. What is the after-tax income if Hank sends his client the bill in January? (Do not round intermediate calculations. Round "PV Factor" to 3 decimal places. Round your answer to 2 decimal places.)after-tax income ?c. Should Hank send his client the bill in December or January?DecemberJanuaryd. What is the after-tax income if Hank expects his marginal tax rate to be 25 percent next year and sends his client the bill in January? (Round "PV Factor" to 3 decimal places. Round your answer to 2 decimal places.)
Answer: a. $14,000
b. $14,106
c. January
2. $15,535
Explanation:
a. If Hank sends the bill in December.
Tax rate is 30% this year.
Amount is $20,000
After Tax Income = 20,000 * (1 - tax)
= 20,000 ( 1 - 30%)
= $14,000
b. If Hank pays Next year
Tax rate is 33%
After tax return rate of 12%
Amount is 20,000
Tax = 20,000 * 33%
= $6,600.
Because this is next year, the present value of the tax needs to be computed for better comparison.
With an after tax return of 12%, the PV will be,
= 6,600 * PV factor ( 12%, 1 period)
= 6,600 * 0.893
= $5,894
The income therefore will be,
= $20,000 - 5,894
= $14,106
c. Hank should pay in January as he would make more income.
2. Tax rate is 25% next year and income is to be received next year.
Tax = 20,000 * 25%
= $5,000
PV of $5,000 = 5,000 * PV Factor (12%, 1 period)
= 5,000 * 0.893
= $4,465
After tax income = 20,000 - 4,465
= $15,535
A new American graduate is contemplating buying a
Japanese, German, or an American car. No matter the type of car, he
plans to buy a new one at the end of 8 years.
The Japanese cars will cost $30,000 and have a fuel
usage of 23 Miles Per gallon (mpg) for the first 2 years and will
decrease by 3% per year thereafter. The repair cost will start at $700
per year, and increase by 3% per year. At the end of year 8, the
car can be sold for $5000. Insurance cost will be $700 for the
first year, increasing by 2% per year thereafter.
A German car will cost $45,000 and have fuel usage
of 21mpg for the first 5 years, and decrease by 1% thereafter to
year 8. The repair cost will start at $1000 in year 1 and increase by
4% per year. It will have a salvage value of $7000 at the end of
year 8. Insurance cost will be $850 the first year, increasing by
2% per year thereafter.
The American car will cost $35,000 and have fuel
usage of 20mpg for the first 3 years and will decrease by 3% per
year thereafter. The repair cost will be $800 in year 1, increasing by
4% per year thereafter. Being an American, the graduate will price
the pride of owning an American car at $0.4 for every 20 miles
driven, increasing by 2% per year. Insurance costs will be $800 per
year increasing by 2.2% per year. The car can be sold for $5500 at
the end of year 8.
If the graduate anticipates driving 150000 miles by
the end of year 8 and the average interest rate is expected to
remain at 5% per year, which car is economically affordable based
on present worth analysis? Assume fuel cost will be $3 per gallon
in year 1 and increase by an average of 2% per year. Show all your
workings.
Answer:
The best option is to buy Japanese Car.
Explanation:
Fuel usage per year is 150000/ 8 = 18750 miles per year
Fuel cost (year 1 -8) = $3.0, $3.06, $3.12, $3.18, $3.25, $3.312, $3.38, $3.5
Japanese Car:
Fuel usage 18750 / 23 = 815 * $3 = $2446
Fuel charges (year 1 -8) = $2445, $2494, $2623, $2758. $2900, $3050, $3207, $3372
Repair Cost (year 1 - 8) = $700, $721, $742, $764, $787, $811, $835, $860
Insurance cost (Year 1 - 8) = $700, $714, $728, $742, $757, $772, $788, $804
Present value of cost at 5% = 24674.07
Cost of car is $30,000
Total cost = $54674.07
American Car:
Cost $35,000
Fuel usage 18750/20 = 937.5 * $3 per gallon = $2812.5.
Fuel charges (year 1 -8) = $2812, $2913, $2986, $3011. $3098, $3124, $3176, $3208
Repair Cost (year 1 - 8) = $800, $894, $921, $978, $1109, $1176, $1207, $1301
Insurance cost (Year 1 - 8) = $800, $827, $876, $898, $908, $932, $954, $934
Present value of cost at 5% = 25302.18
Cost of car is $35,000
Total cost = $60302.
German Car:
Cost = $45,000
Fuel usage 18750 / 21 = 892 * $3 = $2678
Fuel charges (year 1 -8) = $2679, $2732, $2786, $2842. $2899, $2987, $3077, $3171
Repair Cost (year 1 - 8) = $1000, $1040, $1081, $1124, $1169, $1216, $1265, $1316
Insurance cost (Year 1 - 8) = $850, $867, $884, $902, $920, $938, $957, $976
Present value of cost at 5% = 27105.73
Cost of car is $45,000
Total cost = $72105.