Profit is the amount a business earns after deducting what it spends for salaries and other expenses.
assume the own price elasticity of demand for a product is equal to -0.43. if there is a 10% increase in price, how many percent
price elasticity of demand = -0.43
% change in price = 10%
price elasticity of demand =
0.43 × 10 = Percentage change in Quantity demanded
Percentage change in Quantity demanded = 4.3%
Therefore, quantity demanded will decline by 4.3%.
When the government sets a price for wheat that is above the equilibrium price, it is imposing a _____.
When the government sets a price for wheat that is above the equilibrium price, it is imposing a PRICE CEILING.
Suppose a worker in Peru can produce 11 lamps or 4 dressers in a day and a worker in Canada can produce 15 lamps or 6 dressers i
4/11 and 6/15 dressers.
Absolute advantage is the ability of a country to produce more of a product given the same resources than another country per unit time. It also applies when a country is able to produce same amount of goods with another country given less inputs.
So a country that produces more goods uses a more efficient process to get more output.
In this scenario a worker in Peru can produce 11 lamps or 4 dressers in a day and a worker in Canada can produce 15 lamps or 6 dressers in a day. Canada has absolute advantage in producing lamps and dressers, so importing these items will not be beneficial.
To get a balance where both countries will benefit a lamp will have to go for a ratio of each countrie”s product to the opportunity cost.
That is for Peru to produce 4 dressers it will have opportunity cost of 11 lamps. So the ratio is 4/11.
Also for Canada to produce 6 dressers it will have opportunity cost of 15 lamps. So the ratio is 6/15.
Lamp should trade for between 4/11 to 6/15 dressers for both countries to benefit.
Income property cash flow is not the same as taxable income for the following reasons:
– The amount of income that the owner must report for federal income tax purpose is different from the net cash flow created by the rental property
– While the interest part of a mortgage payment is tax deductible, a cash outflow is not tax deductible.
-In the calculation of taxable income from annual operations,a deduction for -depreciation is allowed, however, the owner does not pay for depreciation on an annual basis. This creates a reduction in taxable income as compared to the actual cash flow.