Suzy left her successful law firm to start a bakery. During her first year she d
ID: 1212887 • Letter: S
Question
Suzy left her successful law firm to start a bakery. During her first year she determined that she paid $50,000 in costs and brought in $80,000 of revenue. Is it fair to conclude that her bakery was profitable? Yes, because her revenue exceeds her costs, she is profitable. Yes, because her net revenue is $30,000 which represents investment No, because $30,000 profits isn't very much. No, because we aren't accounting for the salary she gave up. To achieve a higher standard of living, a nation should: Use less capital and more labor in the production process Increase welfare payments to the poor Increase the tax deduction for child dependents Promote economic growth. GDP is: The value of all final good and services produced anywhere in the world by a nation's firms within a given period of time. The value of all final goods and services produced domestically within a given period of time. The value of all final goods and services produced by a government within a given period of time. The sum of all currency and coins in circulation. A price index can be constructed by: Dividing the value of a market basket by the rate of inflation. Multiplying the value of a market basket by the rate of inflation. Multiplying the current-year value of a market basket by the base-year value of the same market basket and dividing by 100. Dividing the current-year value of a market basket by the base-year value of the market basket and multiplying by 100.Explanation / Answer
1) Answer will be D. Because as we didn't knew the salary she gave up to individuals who worked there.It may be more than $30000, in that case total cost exceeds her total revenue, and for that case her bakery was not profitable.SO we can't conclude from the given information that whether her bakery was profitable or not.
2) Answer will be B. Beacuse standard of living includes factors such as income, quality and availability of employment, class disparity, poverty rate, quality and affordability of housing, hours of work required to purchase necessities, gross domestic product, inflation rate, number of holiday days per year, affordable (or free) access to quality healthcare, quality and availability of education, life expectancy, incidence of disease, cost of goods and services, infrastructure, national economic growth, economic and political stability, political and religious freedom, environmental quality, climate and safety. If a nation increase the welfare payments to the poor, then poverty rate will be decreased. And the nation can achieve higher standard of living.
3) Answe will be B. The value of all final goods and services produced domestically within a given period of time.
4) Answer will be D. Dividing the current-year value of a market basket by the base-year value of the market basket and multiplying by 100. o construct a price index we start by selecting a base year. Then we take a representative sample of goods and services and calculate their value in the base year and current prices. The ratio of the expenditures on the basket of goods at current prices to the expenditure at the base year prices is taken as the price index.
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