Given: wages, salaries, and fringe benefits = $5 trillion; profits = $400 billion; interest = $300 billion; rent = $100 billion; and depreciation = $700 billion. How much is National Income? 7. Given: wages, salaries, and fringe benefits = $5.7 trillion; profits = $500 billion; interest = $250 billion; rent = $150 billion; and indirect business taxes = $400 billion. How much is National Income?
C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years. Compounded interest allows for more money that simple interest would. 2. A) If the individual retires at the age of 65, having started the program at age 40, there would be $219,318 in the account. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If
The real wage and rental price of capital also increase by 10 percent. Question 4 (15 marks) a) Public saving equals T-G. An increase in government spending, G, reduces public saving. b) Private saving equals Y-T-C. An increase in government spending does not affect private saving. c) National saving equals Y-C-G. An increase in government spending reduces national saving by an amount equal to the increase in government spending. d) The equilibrium interest rate increases to bring desired investment into equilibrium with the reduced quantity of national saving.
Actual costs were $31.50 / lb., which may indicate unanticipated price increases (for example an increase in commodity prices since steel is a commodity), or higher costs for additional orders of steel required to meet the increased production demand. Although steel price variance was unfavorable, we see a positive impact from efficiency variance, as only 3% more steel (113,400 vs. 100,000 lbs.) was required to produce 8% more output (10,800 vs. 10,000 bikes). Paint has a total unfavorable variance of $1,187. Paint caused an unfavorable variance from both a price and efficiency standpoint.
Explain your answers. a. If a firm in the industry wishes to increase total sales revenue (ignoring cost considerations), will it raise or lower its selling price? Why? The selling price would only increase because the absolute value of -2.5 is 2.5 which are greater than 1 meaning it is elastic and an increase in price leads to a reduction in total revenue.
Ideally, an upward trend in GPM would be achieved. Average cost of goods sold is 88% of sales, which is easily seen as way too high. This could be remediated by either raising sales prices or negotiating lower costs from suppliers. Operating expenses currently utilized to run the operation are minimal. The biggest area which would provide a direct impact is the reduction of merchandise costs.
We cannot afford and will not be approved for extra advertising without research that proves that this advertising will increase revenues more than the cost. The option of raising discounts for the Skyline Buffet and gift shop is not being recommended because it increases our loss to the 20% discount. It will decrease our revenue from the gift shop and Skyline Buffet. This 5% increase has to be offset by a 5% or higher increase in spending through the current members or new members. Further research should be done to the members to see if this change would allow them to purchase more.
This benefit will be evident in the distant future as the unsustainable growth in federal debt would be reined in. The federal debt is currently more than 70 percent of GDP and is growing at a pace higher than GDP (Page & Reichling, 2012). Without current sequestration or a similar solution, the United States would become insolvent much sooner. According to a nonpartisan economic study, removing fiscal tightening like sequestration would boost output and employment in the short term. Conversely, the United States’ output and employment would suffer and lead to larger increases in interest rates over the long term (Page & Reichling, 2012).
This decision was based on an analysis of relevance costs of the fabric at specific quantities based on 2.5 year historical sales volumes. Incremental costs include direct labor, and materials. As shown below in Table 1, for years 1988 – 1989, total revenue minus relevant costs (both incremental and avoidable costs) turns out to be more profitable at the $3.00 price point than at the higher price point because of the increased demand. If BTC decides to stay at the $4.00 per yard price point that they have been employing during the first two quarters of 1990 then their contribution margin will not be as high (see table 1). One interesting point is that the highest contribution margin for BTC will result when both BTC and Calhoun & Pritchard (C&P) raised the price to $4.00; this is still true even with the 20% erosion in demand due to the fabric not being available at $3.00 mentioned in the text book (see table 2).
One of the factors Monsoon would have to consider when deciding at what extent to cut prices would be how much excess supply there is. This is an important factor because if there isn’t that much prices won’t have to be lowered as much because there is less excess supply to get rid of. However if there is a larger amount of surplus stock prices will have to be cut more significantly. In the Monsoon case study there is 5% more surplus clothing which is twice the amount of demand around Christmas time. This means that as there is a substantial amount of excess supply prices should be cut heavily in order to increase the demand for this stock.