If the firm increases the volume of used resources by 30%, and the volume of production thus increases by 20%, then there is a positive effect of the production scale. b) Average fixed costs decrease as production increases. c) The economic profit usually exceeds the accounting profit.
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Question: Indicate whether the following statemnts are true or false:-
a) If the firm increases the volume of used resources by 30%, and the volume of production thus increases by 20%, then there is a positive effect of the production scale.
b) Average fixed costs decrease as production increases.
c) The economic profit usually exceeds the accounting profit.
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- #12 Answer this question based on the given information for an economy in some year. Dollar value of resource extraction activity = $20 billion Dollar value of production activity = $50 billion Dollar value of distribution activity = $80 billion Dollar value of final output = $110 billion Gross output for this economy equals Multiple Choice $260 billion. an amount that cannot be calculated with the information given. $110 billion. $150 billion.Compare and contrast the difference between dynamic (intertemporal) efficiency and static efficiency with respect to non-renewable resources. a. What are the efficiency conditions for each? Explain your answer. b. What costs reflected in the inter-temporal analysis are not captured in the static analysis? Explain your answer. c. How does the discount rate factor into each analysis? d. What impact does the discount rate have on the allocation of non-renewable resources across time and long run price path of non-renewable resources? e. Discuss the ethical issues associated with economists use and choice of a discount rate when analyzing natural resource and environmental problems.1-Label the following as either being a final or intermediate good.A_ Recycled steel purchased by a steel manufacturer.B_ An automobile purchased by a package delivery company.C_A computer purchased by a university for use in the classroom A car purchased by a family.
- During a year of operation, a firm collects $450,000 in revenue and spends $100,000 on labor expense, raw materials, rent and utilities. The firm’s owner has provided $750,000 of her own money instead of investing the money and earning a 10 percent annual rate of return. Question: Higher personal taxes in the U.S. will affect personal disposable income which in turn will affect the domestic demand for goods and services. Costs of production and inputs however continue declining. What do you expect the U.S. output and prices in the near future. Assume we are moving from the old equilibrium to a new equilibrium. Please state clearly your assumptions and include a graph to support your answer.Definition of economic costs Edison lives in Detroit and runs a business that sells guitars. In an average year, he receives $793,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $430,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $15,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Edison does not operate this guitar business, he can work as a financial advisor, receive an annual salary of $50,000 with no additional monetary costs, and rent out his showroom at the $15,000 per year rate. No other costs are incurred in running this guitar business.“Total economic value can be determined by active-use value (such as raw timbervalue to use timber as firewood or furniture) and passive use value (such as tree as anoxygen producing system)”. What do you understand from the above statement??Explain in detail.
- Question 2: Evaluation of Public Expenditure The government has to choose between two different projects:1. Project 1 is organized in six years; the flows happen at the end of each period. It costs 100000, incurring immediately, and yields a return of 50000 for the first three years; in the fourth year, it yields a return of 50000, but the government has to sustain a cost of 20000 in order to make some necessary innovations to the structure of the plan; in the fifth year, it is able to generate a positive return of 60000, while in the last year the revenue is of 50000, but there is a cost of 10000 to close the project. The government assumes that, for the first four years, the discount rate should be 10%, while it is more appropriate to consider a discount rate of 15% in the last two years. 2. Project 2 is organized in four years; the flows happen at the beginning of each period. It costs 50000, incurring immediately, and yields a return of 35000 for the first three years; in the…D6) Suppose there are perfect capital markets with taxes. Investors expect a company to have $120 earnings before interest and taxes in one year. This company has a 25% tax rate, $100 market value of debt, and 20 shares outstanding. This company’s net working capital, depreciation expense, and capital expenditures are all expected to be zero in perpetuity. Investors expect this company to have the same earnings before interest and taxes, market value of debt, tax rate, and number of shares outstanding in perpetuity. The firm’s unlevered cost of equity is 8% and its cost of debt is 5%. Based on this information, what amount would you expect this company’s share price to be closest to? $5 $20 $40 $80 $100 $200 $400When we add depreciation to net investment, we arrive at............... what is the answer, we arrive at gross depreciation or gross investment? Step 1 Depreciation: The term depreciation refers to the fall in the monetary value of a commodity over the time period due to the use of the commodity. During the use of commodity, normal wear and tear, and obsolescence is the measure reason for the depreciation of the commodity. Step 2 Gross Investment Is the answer. The gross investment is the investment that encompasses the net investment and depreciation. If the depreciation is removed from the gross investment then the remaining investment will be the net investment. Similarly, if we add the depreciation with the net depreciation then the resulting investment amount will be the gross investment. Gross Investment = Net Investment + Depreciation Step 3 Answer. Gross depreciation.
- Exhibit 1: Pre-Brexit Income Statement, Assuming £1.00 = €1.36 Per Unit Quantity (Units) € £ Sales in the U.K. £200 40,000 8,000,000 U.K. Costs · Contract Labor (variable cost £5 each) £5 40,000 200,000 · Import of Coffee Machines (invoiced at €90 each) €90 40,000 3,600,000 2,647,059 · Marketing and Distribution Costs (Fixed costs) 400,000 · Other Fixed Costs: Overheads, Interest, Depreciation, Rent, Salaries, etc. 500,000 Profit (U.K. Subsidiary) £4,252,941 (€5,784,000) Recalculate the income statement above using the post Brexit exchange rate of £1.00 = €1.16, assuming that there are no changes in prices charged by the company to U.K. buyers. Calculate profits in both pounds and euros. Fill out Exhibit 2 below with your answers:9. Which statement is incorrect?I. An increase in the general price index means that the purchasing power of money’ has decrease.II. A decrease in the general price index means that the purchasing power of money’ has increase. 10. Which statement is correct?I. Intangible assets cannot be treated as having an indefinite useful life.II. Intangible assets with a finite useful life shall be measured at cost and tested annually for impairmentD6) Among the reasons advanced for state-owned enterprises is _____ A. that the private sector is inefficient. B. that there is unemployment of capable managers. C. the desirability of national control over strategic sectors of the economy. D. None of the above.