Economics Answers

Consider an Economy in its medium run equilibrium. Now suppose that the government passes a stricter law against the exercise of market power leading to decline in mark-up over wages. Explain using IS-LM and AD-AS curves how it will affect price level, interest rate and output in the short run and in the medium run.

Consider an Economy in its medium run equilibrium. Now suppose that the government passes a stricter law against the exercise of market power leading to decline in mark-up over wages. Explain using IS-LM and AD-AS curves how it will affect price level, interest rate and output in the short run and in the medium run.

Answer the following:

1. What are the advantages and disadvantages of perfect competition in the market?

2. Is perfect competition realistic? Justify your answer.

3. What do you think is the importance of the market structure?

A. Choose the letter that corresponds to the correct answer. (Refer to the information below)

(Murayta Enterprises

Statement of Comprehensive Income

For the period ended, December 31, 2020

-Sales - 52,352.50

-Cost of Goods Sold - 16,137.50

-Gross Profit - 36,215.00

-Selling Expenses - 17,662.50

-General and Admin Expenses - 6,407.50

-Operating Income - 12,145.00

-Interest Expense - 525.00

-Net Income - 11,620.00)

1.) Using the vertical analysis, the company's cost of sales is:

A. 31%

B. 22%

C. 1%

D. 100%

2.) Using the vertical analysis, the company's:

A. Operating Expenses is 46%

B. Operating Profit is 23%

C. Other Expense is 1%

D. All are correct

3.) Common-size SCI of Murayta Enterprises provides:

A. 70% gross profit

B. 30% cost of goods sold

C. 22% net income

D. 13% general and andministrative expenses

An Italian exporter exported sports apparel worth €300,000 to the UK, where the exchange rate is 0.85£/€ and billed @ 255000£ to be received after 6 months. Due to exchange fluctuations, the Italian trader received ( though received 2,55000£) in Euros only 270,000€, thus incurring a loss *

A. Choose the letter that corresponds the correct answer.

1.) Vertical Analysis of the statement of financial condition is also known as:

A. Common-size statement of financial position

B. Common-size statement of income

C. Common-size financial performance

D. Vertical SFP

2. The base amount used in a vertical comprehensive income stayement analysis is:

A. Cost of Sales

B. Total Sales

C. Net Sales

D. Gross Profit

A. Choose the letter that corresponds to the correct answer. (Refer to the information below)

(A business had owner's equity of 250,000 and 350,000 in 2020 and 2019 respectively)

1.) What is the behavior of the owner's equity over time?

A. Increasing

B. Decreasing

C. Not moving

D. Slow moving

2.) What is the peso change in owner's equity?

A. 100,000

B. -100,000

C. 29%

D. 40%

3.) What is the percentage change in owner's equity?

A. -29%

B. -40%

C. 29%

D. 40%

A. Choose the letter that corresponds to the correct answer.

1.) This transforms financial statement data into information qhich is interpreted and used as basis for better economic decisions and actions.

A. Financial Statement technique

B. Financial Statement comparison

C. Financial statement evaluation

D. Financial statement analysis

2.) The other term for horizontal analysis.

A. Change Analysis

B. Trend analysis

C. Total Analysis

D. Time Analysis

A. Perform Vertical SCI Analysis for 2020 Statement of Financial Performance.

-Net Sales - 1,687,500

-Cost of Sales - 1,046,250

-Selling Expenses - 270,000

-Administrative Expenses - 135,000

-Interest Expense - 74,250

-Net Income - 162,000