The expenditure method: the sum of the total expenditure on goods and services by households, govts and exports . (the value of exports minus the value of imports) 3. The income method: The sum of the income generated in the production of goods and services, which includes profits, wages and other employee payments, econome from rent and interest earned. Production, income and the circular flow diagram: The circular flow diagram shows the flow of spending and money in the economy. It illustrates the equality between GDP measured from the income and expenditure methods.
a rise in the equilibrium output. a fall in the equilibrium output. Question 10 Let the marginal product of capital (MPK ) be 6; the marginal product of labor (MPL) be 2; the price of labor is given by $10. What will be the price of capital such that the isocost and the isoquant are tangent to each other? $30 $3 $60 $6 Question 11 Which of the following is a property of an isoquant?
Profit Maximization is the process that a firm uses to establish where the best output and price levels are, in order to maximize its return. There are two primary methods that can be used to establish profit maximization. One method is the Marginal Revenue minus the Marginal Cost (MR-MC) method. When utilizing this method economists assume that profit would be at its highest when MR and MC are equal, which denotes that for every item made MP=MR-MC. When / if MR is higher than MC then MP would result in a profit for Company A.
Discuss surplus-enhancing transactions in markets 6. Explain how elasticity affects the way in which the burden of a per-unit tax is shared between buyers and sellers 7. Explain how elasticity affects the size of the deadweight loss created by a per-unit tax **NOTE: All of chapter 5 of Hubbard, Garnett, Lewis and O’Brien (2011) Microeconomics, 2nd edition, Pearson is required reading. 1. Consumer surplus The difference between the highest price a consumer is willing to pay for a good or service, and the price they actually pay.
EGT1 TASK 1 McConnell, Brue and Flynn define Marginal Revenue as “the change in total revenue that results from the sale of one additional unit of a firm’s product; equal to the change in total revenue divided by the change in the quantity of the product sold.” (McConnell, Brue and Flynn, 2012). When we look at the relationship between total revenue and marginal revenue we can see that it is purely a mathematical relationship. The formula that is used to determine Total Revenue is the following; Total Revenue = Price X Quantity, (TR = P X Q). McConnell, Brue and Flynn also define Marginal Cost they state that it is “the extra cost of producing one more unit of output; equal to the change in total cost divided by the change in output.” (McConnell, Brue and Flynn 2011). The marginal cost and total cost is directly related to each other.
Explain how it works. Answer: A method of estimating the price elasticity of demand by observing the change in total revenue that results from a change in the price, when all other influences
Ratio analysis for TRI illustrates conservative debt levels and ability to service additional debt. By borrowing $17,450,000 to invest in production equipment and technologies, liquidity ratios change little. Similarly, solvency ratios change little except for the free cash flow ratio, affected by capital expenditures but not offset by loan proceeds in the calculation. Profitability ratios will realize improvements; gross profit ratios will increase from reduced labor costs. Net income ratios benefit from improved gross profit calculations but also include increased interest and depreciation expense from the new loan and equipment, lowering net income.
? How does systematic risk differ from unsystematic risk? What is meant by the Capital Asset Pricing Model? Describe how it relates to expected return and risk. Find the real return on the following investments: Stock Nominal Return Inflation A 10% 3% B 15% 8% C -5% 2% ?
Calculate the PAYG instalment income and the instalment due to the ATO. Complete the BAS Summary boxes below. Using a general journal format, explain how the payment transaction would be recorded in the accounting system. Supplies you have made Total sales & income & other supplies including capital (GST inclusive) G1 Exports Other GST-free supplies Input taxed sales & income & other supplies ADD G2 + G3 + G4 G1 minus G5 G6 Adjustments (must be total transaction value, i.e. GST inclusive) ADD G6 + G7 Divide G8 by eleven G9 66 191 728 100 G2 G3 Acquisitions you have made Capital acquisitions (GST inclusive) All other acquisitions (GST inclusive) ADD G10 + G11 Acquisitions for making input taxed sales & income & other supplies Acquisitions with no GST in the price Total estimated private use of acquisitions + non-income tax deductible acquisitions ADD G13 + G14 + G15 G7 G8 0 728 100 G12 minus G16 Adjustments (must be total transaction value, i.e.
6. How can GDP per capita and poverty rates indicate standard of living in each system? In your opinion, are these two statistics influenced by the Economic System? Why or why not? 7.