David Ricardo was the political economist who emphasized the importance of the power of producing over wealth itself. His theories on comparative advantage, rent, and labor value have played a significant role in shaping modern economic thought to influence economic policy today.
Ricardo's quote highlights the importance of production capacity over the mere possession of wealth. He believed that the ability to produce goods and services efficiently was crucial for a nation's economic success and growth. According to Ricardo, the power of production could lead to increased wealth, improved living standard, and overall economic development.
One of Ricardo's key contributions to economics was the theory of comparative advantage. This theory suggests that countries should specialize in producing goods and services they can produce most efficiently, even if another country has an absolute advantage in producing them. By specializing and engaging in international trade, countries can benefit from each other's comparative advantages, leading to greater global efficiency and prosperity.
Furthermore, Ricardo's concept of economic rent emphasized the role of scarce resources in determining the distribution of wealth within an economy. He argued that landowners could obtain economic rent – a surplus income – by owning land with unique productive characteristics, which could not be replicated easily.
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you are the only seller of eggs in town, and the price-elasticity coefficient for eggs is known to be 1.25. if you want to increase your sales quantity by 4 percent through a price change, what should you do to the price?
To increase sales quantity by 4 percent, you should decrease the price by 3.2 percent. If the price-elasticity coefficient for eggs is 1.25, it means that a 1% change in the price of eggs will result in a 1.25% change in the quantity of eggs sold.
To increase the sales quantity by 4 percent, we need to determine the price change required to achieve this goal. We can use the following formula:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Rearranging the formula, we get:
% Change in Price = (% Change in Quantity Demanded) / (Price Elasticity of Demand)
Substituting the values given in the question, we get:
% Change in Price = (4%) / (1.25) = 3.2%
Therefore, to increase sales quantity by 4 percent, you should decrease the price by 3.2 percent.
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You are the project manager for a large software project. You and your project team use websites to post updates and progress reports for the project. Which method of communication does this portray?
The method of communication portrayed in this scenario is electronic communication.
Electronic communication refers to the exchange of information, ideas, and messages using electronic media such as websites, emails, video conferencing, instant messaging, etc. In this case, the project team is using a website to post updates and progress reports, which is a form of electronic communication. Electronic communication has become increasingly popular in recent years due to the rise of technology and the internet. It offers a convenient and efficient way to communicate and collaborate with team members, stakeholders, and customers who may be located in different parts of the world.Websites can be an effective method of communication for project teams because they provide a central location where team members can access project updates, progress reports, and other important information. By using a website, project managers can ensure that everyone is on the same page and has access to the most up-to-date information
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if unions were formed in more industries, the supply of labor in other industries would a. decrease, causing employment in other industries to rise. b. increase, causing employment in other industries to fall. c. decrease, causing employment in other industries to fall. d. increase, causing employment in other industries to rise.
If unions were formed in more industries, the supply of labor in those industries would decrease, as workers would be more likely to join unions and demand higher wages and better working conditions. Option D is correct.
This would cause employment in those industries to rise, as employers would need to hire more workers to meet the demands of the unionized workforce.However, the effect on other industries would depend on several factors. If the unionized industries were substitutes for other industries (i.e. producing similar goods or services), then the increased demand for labor in those industries would likely lead to a decrease in employment in the non-unionized industries, as workers move from one industry to another.
On the other hand, if the unionized industries were complements to other industries (i.e. producing goods or services that are used in conjunction with those produced by other industries), then the increased demand for labor in those industries would likely lead to an increase in employment in the non-unionized industries, as the increased production in one industry creates a need for increased production in another.
This would lead to option D, causing employment in other industries to rise.Overall, the effect of unionization on other industries is complex and depends on a variety of factors, including the nature of the industries involved, the degree of substitution or complementarity between them, and the overall state of the labor market.
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before the strategy 2017 (before 2013), what was the main entry mode of arla foods in its 100 non-core markets? group of answer choices wholly owned subsidiaries joint venture export franchising
Before 2013, Arla Foods primarily used exporting as the main entry mode in its 100 non-core markets. This is the correct option.
Exporting involved using intermediaries such as agents, distributors, and retailers to sell Arla's products in foreign markets.
While this entry mode allowed Arla to enter new markets without heavy investments in local operations, it also came with limitations such as limited control over the marketing and distribution of products in foreign markets.
To overcome these limitations and achieve growth targets, Arla Foods shifted its focus to establishing local operations in non-core markets.
The company began setting up joint ventures and wholly-owned subsidiaries to gain greater control over its operations and marketing in these markets.
This strategic shift was formalized in Strategy 2017, which aimed to accelerate the process of establishing local operations and strengthen Arla Foods' presence in non-core markets.
Overall, Arla Foods' shift towards local operations was driven by a desire to have greater control over its operations and marketing in foreign markets, which would enable it to better compete with local players and achieve its growth targets.
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consider the following scenario: a company is setting up different reports to monitor a variety of metrics, such as followers, comments, or clicks. they plan to use these metrics to improve the performance of their social media marketing campaigns over time. which core pillar is this company working on?
The company in this scenario is working on the "Analytics and Measurement" core pillar of their social media marketing strategy. This pillar involves monitoring key metrics, such as followers, comments, or clicks, and using the data to make informed decisions for improving campaign performance over time.
The company in this scenario is working on the core pillar of data analysis and optimization. By setting up different reports to monitor various metrics, they are collecting data that can be analyzed to improve the performance of their social media marketing campaigns over time.
This process of analyzing data and optimizing strategies is essential for achieving long-term success in social media marketing.
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high-tech electronics earned $1.20 per share. if the current market value for a share of stock is $54, what is the firm's pe ratio?
The P/E ratio of 45 indicates that the market is willing to pay $45 for every $1 of earnings that the company generates.
What is P/E ratio?
P/E ratio (Price-to-Earnings ratio) is a financial metric that measures the valuation of a company's stock by dividing its current market price per share by its earnings per share (EPS). It is used to evaluate a company's stock price in relation to its earnings and is often used as an indicator of whether a stock is overvalued or undervalued. The higher the P/E ratio, the more expensive the stock is perceived to be. A low P/E ratio suggests that the stock is undervalued, while a high P/E ratio suggests that the stock is overvalued.
To calculate the price-to-earnings (P/E) ratio, we divide the market value per share by the earnings per share:
P/E ratio = Market value per share / Earnings per share
In this case, the earnings per share is $1.20, and the market value per share is $54. Therefore, the P/E ratio for High-Tech Electronics is:
P/E ratio = $54 / $1.20 = 45
The P/E ratio of 45 indicates that the market is willing to pay $45 for every $1 of earnings that the company generates. This ratio can be used to compare the valuation of High-Tech Electronics to other companies in the same industry or sector.
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An economics illiterate friend of yours with great technicalknowledge in space exploration wishes to start a new company in herarea of expertise. After reading a do-it-yourself entrepreneurmanual she finds out that the basic blueprint for a company’s profitability and survival involves three elements.(A) Find a starting niche from which the firm can expand.(B) Produce the product at scale(C) Create a sales-and-distribution network (3%)Which of the following statements provides the economic rationale for which stage in the above sequence?1. Minimisation of fixed costs of production2. Gaining access to stock exchange finance3. Exploitation of monopoly power to earn economic profits4. Reduction of average cost of production5. Securing long-run lease for the premises of the company6. Obtaining government subsidies
7. Reduction of transaction costs
8. Minimisation of profit tax
In starting a company, each stage in the sequence, starting from finding a starting niche, producing the product at scale, and creating a sales-and-distribution network involves some economic rationale.
Here are the economic rationale for each stage of starting a company:
(A) Find a starting niche from which the firm can expand:
The economic rationale for this stage is the "3. Exploitation of monopoly power to earn economic profits."
Finding a niche allows the company to specialize and potentially dominate a specific market, which may lead to monopoly power and the ability to earn higher profits.
(B) Produce the product at scale:
The economic rationale for this stage is "4. Reduction of average cost of production."
When a company produces its product at scale, it can take advantage of economies of scale. This means that the average cost of production decreases as the company produces more units, ultimately leading to higher profitability.
(C) Create a sales-and-distribution network:
The economic rationale for this stage is "7. Reduction of transaction costs."
By creating an efficient sales and distribution network, the company can reduce transaction costs associated with selling and distributing its products. Lower transaction costs can lead to increased profits for the company.
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what is the difference between the short run and the long run for a monopolistic competitor? what is the difference between the short run and the long run for a monopolistic competitor? in the short run, the firm produces where mr
The difference between the short run and long run for a monopolistic competitor is that in the short run, it's possible to earn economic profit, but in the long run, economic profits attract competition and disappear.
Companies in a monopolistic competition make economic profits in the short run, but in the long run, they make zero economic profit. The latter is also a result of the freedom of entry and exit in the industry. Economic profits that exist in the short run attract new entries, which eventually lead to increased competition, lower prices, and high output.
Such a scenario inevitably eliminates economic profit and gradually leads to economic losses in the short run. The freedom to exit due to continued economic losses leads to an increase in prices and profits, which eliminates economic losses.
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Measures that restrict the quantity of an item a nation can export, with the effect of limiting the number of goods imported by another country, is called
The measures that restrict the quantity of an item a nation can export, with the effect of limiting the number of goods imported by another country, is called an export quota. An export quota is a trade restriction that sets a specific limit on the quantity of a particular product that a country can export to other countries.
The purpose of implementing an export quota is to ensure that the country's domestic industries have access to sufficient raw materials or supplies for their production, while at the same time limiting competition from other countries. Export quotas are often used by countries to protect their domestic industries from foreign competition, which can help to create jobs and boost economic growth.
However, export quotas can also lead to higher prices for consumers in the importing countries, which can have a negative impact on their economies. Additionally, export quotas can sometimes result in black markets or illegal trade, as some exporters may try to exceed the quota or sell their products to other countries through illegal channels.
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what is assembly bill number 1196? how would this new law changeand benefit california? how would it change the justice system?
Assembly Bill Number 1196, also known as AB 1196, is a new law proposed in California that aims to change and benefit the state in several ways. This bill proposes to eliminate the cash bail system, which is currently used in the state's justice system to ensure that individuals charged with a crime show up for their court appearances. Instead, the bill proposes that judges use a risk assessment tool to determine whether a defendant is a flight risk or poses a danger to the community.
If passed, AB 1196 would bring several benefits to California. For one, it would eliminate the current practice of allowing wealthy defendants to pay bail and go free while poorer defendants must remain in jail. Additionally, it would free up space in county jails, which are often overcrowded due to the high number of individuals held in pretrial detention.
AB 1196 would also change the justice system in California in significant ways. By eliminating cash bail, judges would have more discretion to determine who should be released and who should remain in custody. Additionally, the bill proposes to create a pretrial services division within each county's probation department to provide support to those who are released pretrial, including helping them find employment and housing. These changes are designed to make the justice system in California fairer and more equitable for all residents.
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T/F? In dividend discount models (DDM) with supernormal growth, supernormal growth may continue indefinitely.
The given statement “In dividend discount models (DDM) with supernormal growth, supernormal growth may continue indefinitely” false.
Because In dividend discount models (DDM) with supernormal growth, it is assumed that the supernormal growth rate will eventually decrease to a sustainable rate.
In DDM, the assumption is that dividends will eventually stabilize and grow at a sustainable rate in the long run, which is often estimated using the company's expected long-term growth rate.
Therefore, while supernormal growth may be projected for a certain period of time, it is not expected to continue indefinitely in DDM, as it is considered to be unsustainable over the long term.
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an engineer borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. the bank agreed to reduce the interest on the loan if interest rates declined before the loan was fully repaid. after the third payment, the bank agreed to reduce the interest rate on the remaining debt to . what was the amount of the equal annual end-of-year payments for each of the first 3 years? what was the amount of the equal annual end-of-year payments for each of the last 3 years?
The engineer needs to make equal annual end-of-year payments of $638.69 for each of the first three years and needs to make equal annual end-of-year payments of $614.46 for each of the last three years.
To find the amount of the equal annual end-of-year payments, we can use the present value formula for an annuity:
PV = PMT x [(1 - (1 + r)⁻ⁿ) / r]
where PV is the present value of the loan, PMT is the equal annual end-of-year payment, r is the interest rate, and n is the number of payments.
For the first three years, the engineer is required to make six equal end-of-year payments at 8%. So we can use the above formula to find the PMT:
PV = $3000
r = 8%
n = 6
PV = PMT x [(1 - (1 + r)⁻ⁿ) / r]
$3000 = PMT x [(1 - (1 + 8%)⁻⁶) / 8%]
Solving for PMT, we get:
PMT = $638.69
After the third payment, the bank agreed to reduce the interest rate on the remaining debt. Let's say the new interest rate is r₁. We can use the present value formula again to find the PMT for the last three years:
PV = PMT x [(1 - (1 + r1)⁻ⁿ) / r₁]
where PV is the remaining balance after the third payment.
The remaining balance after the third payment can be calculated using the present value of an annuity formula:
PV = PMT x [(1 - (1 + r)⁻ⁿ) / r] x (1 + r)^⁻ˣ
where x is the number of years after the third payment.
PV = $3000 x [(1 - (1 + 8%)⁻⁶) / 8%] x (1 + 8%)⁻³
PV = $1625.57
Let's assume the bank reduced the interest rate to 6%. So we can use the above formula to find the PMT:
PV = $1625.57
r₁ = 6%
n = 3
PV = PMT x [(1 - (1 + r1)⁻ⁿ) / r₁]
$1625.57 = PMT x [(1 - (1 + 6%)⁻³) / 6%]
Solving for PMT, we get:
PMT = $614.46
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____ provide general guidance to managers, while ____ are specific to the situation allow no discretion by the individual manager.Procedures, goalPolicies, rules
policies provide general guidance to managers, while specification are specific to the situation allow no discretion by the individual manager. A manual for executives outlining the security objectives of your organisation.
How a certain resource or system is used operationally or to fulfil a business purpose is described by a security aim. We also talk about how system setup and maintenance are important to company leaders. The strategic direction, range, and tone of all security measures are established.
A strategic information security strategy, often known as an overall security policy. Access control lists and configuration specifications are the two most popular methods for implementing such technical controls. User access lists, matrices, and function tables make up access control lists (ACLs), which control user rights and privileges. The two main types of shape and mass are geometric and organic. Geometric shapes and masses somewhat resemble designated and identifiable shapes.
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Incentive pay plans are given to ________.A.management onlyB.individuals onlyC.those who are in production, not management, rolesD.individuals, teams, or the entire companyE.teams only
individuals, teams, or the entire company. Incentive pay plans can be provided to individuals, teams, or the entire company as a means to motivate and reward performance in achieving specific goals or targets. Thus the correct question is D.
Employers frequently use incentive compensation programmes to encourage staff to perform better and meet certain objectives. These strategies can be made available to certain people, groups, or the entire business. They might include a variety of prizes depending on an individual's or group's success, such as bonuses, profit-sharing, stock options, or other incentives.
Plans with incentives are frequently utilised to boost output, raise standards, lower expenses, or accomplish other strategic goals. They may be used throughout the organization's divisions and levels to promote better levels of engagement, motivation, and dedication and are not only confined to management or production jobs.
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3. which of the following is correct concerning bonds? a. a callable bond may be redeemed by the issuer within the terms of the indenture agreement b. a puttable bond may be redeemed by the issuer within the terms of a puttable bond is likely to be redeemed when interest rates have declined since issuance the indenture agreement c. a puttable bond is likely to be redeemed when interest rates have declined since issuance d. a callable bond is likely to be redeemed when interest rates have risen since issuance
Concerning bonds, option (a) is correct - a callable bond may be redeemed by the issuer within the terms of the indenture agreement. This means that the issuer of the bond has the option to redeem the bond before the maturity date, as specified in the bond's indenture agreement.
This option is usually exercised by the issuer when interest rates have fallen, allowing them to issue new bonds at a lower interest rate. On the other hand, a put-able bond (option b) gives the bondholder the right to redeem the bond before maturity, while a callable bond (option d) is likely to be redeemed when interest rates have risen since issuance. It is important for investors to consider the call and put provisions when investing in bonds, as they can affect the yield and potential return on investment. Overall, understanding the terms and provisions of bonds is essential for making informed investment decisions.Therefore, option A is the right one.
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Trading risk faced by U.S. banks results from:
a. the free-rider problem.
b. changes in regulations.
c. adverse selection.
d. moral hazard.
The trading risk faced by U.S. banks results from adverse selection. The correct option is C.
Trading risk is the risk that a bank faces in its trading activities, including the risk of loss from changes in market prices, interest rates, or other market factors. Adverse selection is a type of trading risk that occurs when one party in a transaction has more information than the other party, leading to a situation where the less-informed party bears more risk than they would if they had all the information.
In the context of U.S. banks, adverse selection can arise in a variety of trading activities, such as when banks buy and sell securities or engage in derivatives trading.
Thus, the ideal selection is option C.
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Happiness can be produced with wine and roses according to Q = W1/2R1/4, where W isbottles of wine and R is bouquets of roses obtained per month. If wine costs $20 per bottle androses cost $60 per dozen, what is the optimal combination of wine and roses if your budget is$360? W = 12 bottles, R = 2 bouquets.
According to the given happiness production function Q = W^(1/2)R^(1/4), happiness can be produced using a combination of wine (W) and roses (R). Wine costs $20 per bottle and roses cost $60 per dozen. With a budget of $360, we need to find the optimal combination of wine and roses to maximize happiness.
To solve this, we can use the Lagrangian multiplier method. First, let's write down the budget constraint:
20W + 60R = 360
Now, create the Lagrangian function:
L(W, R, λ) = W^(1/2)R^(1/4) + λ(360 - 20W - 60R)
Differentiate L with respect to W, R, and λ, and set the derivatives equal to 0:
dL/dW = (1/2)W^(-1/2)R^(1/4) - 20λ = 0
dL/dR = (1/4)W^(1/2)R^(-3/4) - 60λ = 0
dL/dλ = 360 - 20W - 60R = 0
Solving these three equations simultaneously, we find the optimal combination of wine and roses to be W = 12 bottles and R = 2 bouquets. Therefore, to maximize happiness with a budget of $360, you should buy 12 bottles of wine and 2 bouquets of roses.
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Without a legal disclaimer in the job description's language, a job description could be considered a contract between the employee and the employer.TrueFalse
False. The statement Without a legal disclaimer in the job description's language, a job description could be considered a contract between the employee and the employer is incorrect.
A written account of the primary duties and obligations of a position is known as a job description, or JD. It could include information about the qualifications or skills needed for the job, specifics on the tools, equipment, and work aids used, details on the working environment, physical requirements, and a salary range. Most job descriptions are narratives, however some could just be a list of skills.
For instance, an organization's competency architecture may be developed using techniques to strategic human resource planning, from which job descriptions can be obtained as a shortlist of competencies. interactions with other employees, including management responsibilities, supervisory level, and interactions with coworkers, may be mentioned in a job description.
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a firm has $20 million in equity and $20 million of debt, it pays dividends of 20% of net income, and has a net income of $5 million. what is the firm's sustainable growth rate?
The sustainable growth rate of the firm is 20%, meaning that the firm can grow by 20% using its own resources without the need for external financing.
The sustainable growth rate of a firm refers to the rate at which the firm can grow using its own resources without the need for external financing. To calculate the sustainable growth rate, we need to consider the firm's equity, debt, dividends, and net income.
In this case, the firm has $20 million in equity and $20 million in debt, and it pays dividends of 20% of net income, which is $1 million ($5 million x 20%). The remaining net income after dividends is $4 million ($5 million - $1 million).
To calculate the sustainable growth rate, we can use the formula:
Sustainable Growth Rate = (Net Income - Dividends) / Equity
= ($4 million) / ($20 million)
= 0.2 or 20%
It is important for a firm to maintain a sustainable growth rate to ensure long-term profitability and success.
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In 2018, Amazon raised the annual subscription fee for its Prime membership service, which provides free two-day shipping on many goods and other benefits, from $99 to $119. Piper Jaffray, an investment bank, estimated that before the price increase, Prime had 77 million U.S. subscribers.3 the bank speculated that the number of members would fall to about 62 million. If so, what is the arc elasticity of demand for a Prime membership?
The arc elasticity of demand for a Prime membership is -1.114.
To calculate the arc elasticity of demand for Prime membership, we need to know the percentage change in quantity demanded and the percentage change in price.
The percentage change in quantity demanded can be calculated as
((Q₂-Q₁)/((Q₂+Q₁)/2)) x 100
Where Q1 is the initial quantity demanded (77 million subscribers) and Q₁ is the new quantity demanded (62 million subscribers).
((62-77)/((62+77)/2)) x 100 = -18.75%
The percentage change in price can be calculated as
((P₂-P₁)/((P₂+P₁)/2)) x 100
Where P₁ is the initial price ($99) and P₂ is the new price ($119).
((119-99)/((119+99)/2)) x 100 = 16.81%
The arc elasticity of demand can then be calculated as
(percentage change in quantity demanded)/(percentage change in price)
-18.75/16.81 = -1.114
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Suppose inflation in the United States rose to around 9 percent a year; this would _____________ the demand for U.S. currency by foreigners.
Suppose inflation in the United States rose to around 9 percent a year; this would likely decrease the demand for U.S. currency by foreigners.
The increase in inflation can lead to a depreciation of the U.S. currency, as its purchasing power decreases. As a result, foreigners may be less inclined to hold U.S. dollars or invest in U.S. assets, leading to a decrease in demand for the currency.
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.
Consumers’ cost of living depends on the prices of many goods and services and the share of each in the household budget. To measure the average consumer’s cost of living, government agencies conduct household surveys to identify a basket of commonly purchased items and track over time the cost of purchasing this basket.
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A central feature of Prahalad and Hamel's model of business strategy is its focus on functional business units within a firm. core competencies within a firm. core competencies of competing firms. firm comparisons across industries.
A central feature of Prahalad and Hamel's model of business strategy is the focus on core competencies within a firm. The Correct option is C
The model proposes that businesses should identify their unique strengths and capabilities that give them a competitive advantage over other firms. These competencies could be in areas such as technology, marketing, or production processes. By identifying and leveraging these competencies, businesses can develop innovative products, services, or business models that create value for customers and generate profits.
This approach requires a deep understanding of the company's internal capabilities, as well as the external market environment. Prahalad and Hamel argue that companies that can effectively leverage their core competencies will be able to outperform their competitors and achieve long-term success.
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Complete Question:
Which of the following is a central feature of Prahalad and Hamel's model of business strategy?
a) Focus on functional business units within a firm.
b) Core competencies within a firm.
c) Core competencies of competing firms.
d) Firm comparisons across industries.
EXERCISE 31.1 (Contributing to a public good) Each of n people chooses whether or not to contribute a fixed amount toward the provision of a public good. The good is provided if and only if at least k people contribute, where 2
The scenario described involves a group of n people who must decide whether or not to contribute a fixed amount towards a public good. The provision of the good is contingent on at least k people contributing.
This situation is an example of a collective action problem, as each individual's decision to contribute or not affects the overall outcome. In particular, if too few people contribute, the public good will not be provided, which may be detrimental to everyone in the group. One potential solution to this problem is to use incentives or punishments to encourage contributions. For example, the group could agree to provide a reward to those who contribute, or to penalize those who do not. Alternatively, social norms or peer pressure could be used to encourage contributions, as people may be more likely to contribute if they feel that others expect them to do so. Overall, solving collective action problems requires finding ways to align individual incentives with the collective good. This can be a challenging task, but it is essential for achieving outcomes that benefit everyone in the group.
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indian division produces the h20-model pump that can be used by maple division in the production of motors that regulate the raising and lowering of the boat engine's stern drive unit. the market price of the h20-model is $720, and the full cost of the h20-model is $540. required: 1. if burt has a transfer pricing policy that requires transfer at full cost, what will the transfer price be? $fill in the blank 1 do you suppose that indian and maple divisions will choose to transfer at that price? maple division indian division 2. if burt has a transfer pricing policy that requires transfer at market price, what would the transfer price be? $fill in the blank 4 do you suppose that indian and maple divisions would choose to transfer at that price? maple division indian division 3. now suppose that burt allows negotiated transfer pricing and that indian division can avoid $120 of selling expense by selling to maple division. which division sets the minimum transfer price? what is the minimum transfer price? $fill in the blank 8 which division sets the maximum transfer price? what is the maximum transfer price? $fill in the blank 10 do you suppose that indian and maple divisions would choose to transfer somewhere in the bargaining range?
The maximum transfer price for the Maple division would be the market price of $720.
If Burt has a transfer pricing policy that requires transfer at full cost, the transfer price will be $540. It is likely that both Indian and Maple divisions will choose to transfer at that price, as it covers the production cost for the Indian division.
If Burt has a transfer pricing policy that requires transfer at market price, the transfer price would be $720. The Indian division may prefer this price, as it reflects the market value. However, the Maple division might find it less appealing, as it is higher than the full cost.
With negotiated transfer pricing, the Indian division can avoid $120 of selling expenses by selling to the Maple division. Therefore, the minimum transfer price for the Indian division would be $420 ($540 - $120). The maximum transfer price for the Maple division would be the market price of $720. It is likely that both divisions would choose to transfer somewhere within the bargaining range, as it offers flexibility and benefits for both parties.
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If a bank has more interest-rate sensitive liabilities than interest-rate sensitive assets, an increase in the interest rate will cause profits to:
a. increase.
b. decrease.
c. remain constant.
d. be negative, meaning there will not be profits, only losses.
If a bank has more interest rate-sensitive obligations than assets, an increase in interest rates will result in lower profitability. answer is option (b).
What is interest-rate?The cost of borrowing money or the rate of return on a savings account or other investment is known as the interest rate. It is stated as a percentage of the borrowed or invested main sum. The type of loan or investment, the term's length, the borrower's credit history, and other factors can all have a significant impact on interest rates. In general, the riskier an investment or loan is, the higher the interest rate will be.
Investments with little risk often have low interest rates, and those with high risk typically have high interest rates. In general, banks base their loan interest rates on the short-term interest rates established by the Federal Reserve. This is because, while the bank's assets won't appreciate as much, its liabilities will cost more to service. Because of this, the bank's net interest revenue will drop, which would lower earnings.
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An increase in interest rates will have a negative impact on profitability if a bank has more obligations than assets that are affected by the interest rate.
Option B is correct .
What does interest rate mean?The interest rate is the cost of borrowing money or the rate of return on a savings account or other investment. It is stated as a percentage of the principal amount borrowed or invested. Interest rates can be significantly influenced by a variety of factors, including the borrower's credit history, the length of the loan or investment, and the type of loan or investment. In general, the interest rate on an investment or loan will be higher the more risky it is.
Interest rates are typically low for investments with little risk, whereas they are typically high for investments with a lot of risk. The Federal Reserve's short-term interest rates typically serve as the foundation for banks' loan interest rates. This is because servicing the bank's liabilities will be more expensive while the bank's assets will appreciate less. The bank's net interest revenue will decrease as a result, which will result in lower earnings.
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assigning value to assets in nonmonetary exchange with commercial substance mariot inc. trades its old equipment (with the following carrying values) for new equipment with a $4,800 fair value. mariot paid $2,800 cash on the exchange. original cost of old equipment $4,000 accumulated depreciation on old equipment 3,200 if the transaction has commercial substance, what amount does mariot assign to the new equipment? amount assigned to new equipment answer
Mariot Inc. would assign $3,600 to the new equipment in this nonmonetary exchange with commercial substance.
To determine the amount Mariot Inc. assigns to the new equipment in this nonmonetary exchange with commercial substance, we need to follow the accounting guidelines for such transactions.
First, we need to calculate the book value of the old equipment, which is the carrying value before the exchange:
Book value of old equipment = Original cost - Accumulated depreciation
Book value of old equipment = $4,000 - $3,200
Book value of old equipment = $800
Since the fair value of the new equipment is higher than the book value of the old equipment, we recognize a gain on the exchange. The gain is calculated as follows:
Gain on exchange = Fair value of new equipment - Book value of old equipment
Gain on exchange = $4,800 - $800
Gain on exchange = $4,000
However, because Mariot Inc. only paid $2,800 in cash for the trade, we must modify the gain to account for the cash spent:
Gain on exchange adjusted = Gain on exchange minus cash paid
Exchange gain adjusted = $4,000 - $2,800
Exchange gain adjusted = $1,200
Finally, we assign the new equipment the adjusted gain:
Amount assigned to new equipment = new equipment's fair value minus the adjusted gain on exchange
The amount allotted to new equipment is $4,800 minus $1,200.
The amount allotted to new equipment is $3,600.
As a result of this nonmonetary trade with commercial substance, Mariot Inc. would allocate $3,600 to the new equipment.
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What are two attributes of a foreign direct investment? high risk; low reward high risk; high reward low risk; high reward low risk; low reward
High risk and high reward are two important attributes of foreign direct investment.
Foreign direct investment (FDI) refers to the investment made by a company or an individual in a foreign country by establishing a business or acquiring a company. The two main attributes of FDI are high risk and high reward.
FDI is considered a high-risk investment because it involves a significant amount of money and resources to set up a business in a foreign country. The investor has to deal with various risks such as political instability, economic uncertainty, regulatory changes, and cultural differences, which can have a negative impact on the investment.
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Complete Question
What are the two attributes of a foreign direct investment?
A) high risk; low reward
B) high risk; high reward
C) low risk; high reward
D) low risk; low reward
A sole proprietor earns $100,000 of revenue, incurs $45,000 of deductible business expenses, and withdraws $30,000 of cash from the business checking account to pay personal expenses. The taxable profit reported on the sole proprietor's Form 1040 (before any allowable Section 199A deduction) is ______.
A) $55,000
B) $30,000
C) $85,000
The taxable profit reported on the sole proprietor's Form 1040 is $25,000 (before any allowable Section 199A deduction) is $55,000.
The calculation is as follows:
Revenue: $100,000
Minus: Deductible business expenses: $45,000
Equals: Net business income: $55,000
Minus: Withdrawals for personal expenses: $30,000
Equals: Taxable profit: $25,000So the taxable profit reported on the sole proprietor's Form 1040 is $25,000. However, this is before any allowable Section 199A deduction.
The taxable profit reported on the sole proprietor's Form 1040 is calculated as followsRevenue: $100,000
Less: Deductible business expenses: $45,000Equals: Net business income: $55,000Since the sole proprietor withdrew $30,000 of cash from the business checking account to pay personal expenses, this amount is not a deductible business expense and is not subtracted from the net business income. Therefore, the taxable profit reported on the sole proprietor's Form 1040 is $55,000.
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According to the Keynesian Cross unplanned inventory investment equals: A. I = planned investment B. PE = C +I+G = planned expenditure C. The difference between actual & planned expenditure D. actual expenditure
According to the Keynesian Cross, unplanned inventory investment equals the difference between actual expenditure and planned expenditure (C+I+G). The correct option is C.
In other words, if the actual expenditure is lower than the planned expenditure, firms will end up with unsold inventory, which is considered an unplanned inventory investment. This unplanned investment is not equal to planned investment (I), which is the investment that firms make based on their expected future profits and economic conditions.
The equilibrium level of real GDP is determined by the point at which the total or aggregate expenditures in the economy equal the amount of output produced, according to the expenditure-output model, often known as the Keynesian cross diagram.
Thus the correct option is C.
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Provide three reasons often given for protectionism andexplain
Protectionism is an economic policy in which a country imposes trade barriers, such as tariffs or quotas, to protect its domestic industries from foreign competition. Here are three reasons often given for protectionism:
1. Infant Industry Argument: Protectionism can be used to support and nurture new or emerging domestic industries (infant industries) that may not be able to compete with established foreign competitors. By imposing trade barriers, the government provides these industries with a temporary advantage, allowing them to grow and become competitive over time.
2. National Security: Some countries adopt protectionist policies to safeguard industries that are vital for national security. For example, a country may protect its domestic steel industry to ensure a stable supply for its military and infrastructure needs, even if it is not the most cost-effective option.
3. Job Preservation: Protectionism can help preserve domestic jobs by reducing the influx of cheaper foreign goods and services. By imposing trade barriers, countries can encourage domestic production, which may help maintain or create jobs within their own borders.
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