Economics Answers

Kali lives on mangoes and avocados, Pm = $5, Pa = $10, and her income is $200.

Identify and illustrate on a new graph Kali’s new budget constraint if her income doubled, the price of mangoes doubled, and the price of avocados remained constant.

Household Consumption and Budget Constraints

Kali lives on mangoes and avocados, Pm = $5, Pa = $10, and her income is $200.

A. Identify her budget constraint equation and illustrate Kali’s budget line on a graph

with mangoes on the horizontal axis and avocados on the vertical axis.

B. Identify and illustrate on a new graph Kali’s new budget constraint if her income

doubled, the price of mangoes doubled, and the price of avocados remained constant.

C. Explain the impact on her real income when the price changed in the scenario in B

assuming income had remained constant.

On September 30th, Company “A” sold a vehicle for 20,000 . to company “B”, the historical cost for the vehicle was 100,000 . and its accumulated depreciation was 90,000 . at the time of sale. What are the required Journal entries to be made in both companies?

On December 31, 2018, Company “A” had a loan commitment amounted 100,000 ., classified as follows:- 40,000 . as short-term, 60,000. as long-term. On January 10, 2019, the company agreed to refinance the loan commitments with an extra 10,000 . of interest, so the loan classifies as follows:-

25,000 . as short-term, 85,000 as long-term.

What’s the loans balance that’s should appear on the company’s financial statements, note that the financial statements were issued on February 12, 2019? Why

On January 1st, “A” Company sold 50,000 . worth of goods to “B” Company with a sale discount of 5,000 . which result 45,000 . in net. On January 2nd, “B” Company returned 10,000 . worth of the goods, 3,000 . of it were defected goods and the rest of it didn’t comply with “B” Company requirements. What are the required Journal entries to be made in both companies?

In the month of March 2021, The TAMCC’s Restaurant inventory card for M&B Wine – 750ml showed the following entries:

    April 30: Balance of 5- 750ml bottles of M&B wine @ $10.00 each.

    March 2: Purchased 12- 750ml bottles of M&B wine @ $12.00 each.

    March 8: Sold 10- 750ml bottles of M&B wine.

    March 12: Sold 5- 750ml bottles of M&B wine.

    March16: Purchased 24- 750ml bottles of M&B wine @ $13.00 each.

    March 25: Sold 10- 750ml bottles of M&B wine.

    March 30: Sold 5- 750 ml bottles of M&B wine.

i)                  Determine the quantity and value of the ending inventory and cost of sales for the month of March using the various inventory methods.

ii)               Assume that each M&B wine 750ml bottle is sold for $26.

 Calculate the total sales & profit for each method used in (i) above.

iii)            Prepare a summary table and describe the table.

Which method would you recommend and why.

As the Manager of TAMCC Hotel, Inc., - Restaurant and Bar, you just purchased a doughnut making machine for $100,000. It has a salvage value of $10,000 and the useful life of 5 years. The machine is expected to produce 360,000 doughnuts: 70,000 in year 1; 80,000 in year 2; 90,000 in year 3; 70,000 in year 4; and 50,000 year 5.

i.                  Calculate the annual depreciation expense using the FIVE methods.

Create a table of Production Schedule for Output X with Variable Labor Input using the Marginal Product Form.

Consider the following goods and services. Which are the most likely to be produced in a

perfectly competitive industry? Which are not? Explain why you made the choices you did,

relating your answer to the assumptions of the model of perfect competition. Please address all of

the examples below in your discussion.

1. Coca-Cola and Pepsi

2. Potatoes

3. Private physicians in your local community

4. Government bonds and corporate stocks

5. Taxicabs in Lima, Peru—a city that does not restrict entry or the prices drivers can charge

6. Oats

Suppose that there are only two goods produced in the economy, Call center services and banking services. Prices (P), quantities (Q) and the number of workers (W) occupied in the production of each good for year 1 and year 2 are given by the following table :

Year 1

Year 2 

Two

P1

Q1

W1

P2

Q2

W2

products

Call cen

tre

10

10

0

50

12

10

0

50

Banking

10

20

0

50

12

23

0

60

a. What is nominal GDP in each year?                                                              

b. Using year 1 prices, what is real GDP in year 2? What is the growth rate of real gdp

c. What is the rate of inflation using the GDP deflator?                             

d. Using year 1 prices, what is real GDP per worker in year 1 and year 2? What is labour productivity growth between year 1 and year 2 for the whole economy?