As a result of the decrease in the world price, consumer surplus in the United States by $ million, producer surplus by $ million, and total surplus by $ million. (Hint: Recall that the area of a triangle is 12×Base×Height .) Suppose the U.S. government responded by putting a tariff of $100 on imported televisions. As a result of this import tariff, consumer surplus will , and producer surplus will . The government will raise $ million in revenue at the cost of $ million in deadweight loss. True or False: From the standpoint of U.S. welfare, this is a good policy, but domestic producers will not support it. A. True B. False

Answers

Answer 1
Answer:

The tariff has resulted in a net drop of $80 million in combined surplus between consumers and producers, but a $60 million increase in government income, which is less than the net decrease in combined surplus between consumers and producers.This means that the tariff policy is not helpful for the welfare of the United States, and hence the supplied statement is FALSE.

What are the increase and decreases of consumer and producer surplus?

Prior to technological development, demand was 1000 units, while supply was 400. This means there are 600 units of imports.

The globe price drops by $100 as a result of technical improvement. Area CEDG is responsible for the increase in consumer surplus.

\text{ Increase in consumer surplus  (in thousand dollars)} = \text{area CEDB}

= \text{area CEJB} + \text{area BJD}\n= {[P1-(P1-100)] \text{ x } (1,000 - 0)} + {1/2 \text{ x } [P1-(P1-100)] \text{ x } (1,200 - 1,000)}\n= (100 \text { x } 1,000) + (1/2 \text{ x } 100 \text{ x } 2000)\n= 100,000 + 10,000\n= 110,000

The decrease in producer surplus is given by area CEFG in image format

As a result of the lower world price, the consumer surplus rises $110,000, or $110 million; the producer surplus falls $30,000, or $30 million, and the total surplus raises $80 million.

The price will return to its original level if the government imposes a $100 tariff on imported televisions.

Imports will be reduced to 600 units, as well. Both the consumer and producer surpluses will return to their previous levels. A total of $60 million will be raised by the government.

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Answer 2
Answer:

Answer

The answer and procedures of the exercise are attached in the images below.

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  


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The shapes of firms' cost curves are important because:___________a. they tell us whether a firm is profitable or not.b. they help us determine how much a firm will produce and even how it will produce it.c. cost curves tell us the profitability of the firm.d. they help us understand the market that the firm is in.
Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January 2 Issues 100,000 shares of common stock for $35 per share. February 6 Issues 3,000 shares of 8% preferred stock for $11 per share. September 10 Purchases 11,000 shares of its own common stock for $40 per share. December 15 Resells 5,500 shares of treasury stock at $45 per share. In its first year of operations, Finishing Touches has net income of $160,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $2,400 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
On January 2, 2021, Ivanhoe, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $320000 starting at the beginning of the first year, with title passing to Ivanhoe at the expiration of the lease. Ivanhoe treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Ivanhoe uses straight-line depreciation for all of its plant assets. Aggregate lease payments were determined to have a present value of $1966261, based on implicit interest of 10%.In its 2021 income statement, what amount of interest expense should Ivanhoe report from this lease transaction?

Beverly Crusher is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred. April 2 Invested $34,830 cash and equipment valued at $15,540 in the business.
2 Hired a secretary-receptionist at a salary of $320 per week payable monthly.
3 Purchased supplies on account $830. (Debit an asset account.)
7 Paid office rent of $630 for the month.
11 Completed a tax assignment and billed client $1,360 for services rendered. (Use Service Revenue account.)
12 Received $3,940 advance on a management consulting engagement.
17 Received cash of $2,950 for services completed for Ferengi Co.
21 Paid insurance expense $150.
30 Paid secretary-receptionist $1,280 for the month.
30 A count of supplies indicated that $130 of supplies had been used.
30 Purchased a new computer for $7,000 with personal funds. (The computer will be used exclusively for business purposes.)

Journalize the transactions in the general journal. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Answers

Answer:

Cash          34,830

Equipment 15,540

     Capital Account          50,370

no entry needed

supplies 830

   account payable 830

rent expense 630

     cash                  630

account receivable 1,360

      service revenue          1,360

cash        3,940

    unearned revenue      3,940

cash      2,950

    service revenue     2,950

insurance expense 150

    cash                             150

wages expense   1,280

    cash                               1,280

supplies expense   130

        supplies                 130

Equipment- Computer 7,000

       Capital Account               7,000

Explanation:

We must always o debit = credit

and record the entries to reflect the reality.

Following is a recent BusinessSoftware Corp. press release: REDMOND, Wash.—March 16, 2016 — BusinessSoftware Corp. today announced that its board of directors have declared a quarterly dividend of $0.18 per share. The dividend will be payable on June 9, 2016, to shareholders of record on May 19, 2016. The ex-dividend date will be May 17, 2016 Prepare the journal entries BusinessSoftware Corp. used to record the declaration and payment of the cash dividend for its 8,600 million shares.

Answers

Answer:

Explanation:

1. The journal entry for declaration of dividend is shown below:

Retained Earnings A/c Dr

= (8,600 million shares × $0.18 per share) = $1,548 million

          To Dividend payable in cash                                         $1,548 million

(Being dividend is declared)

2. No journal entry should be passed on the record date

3. The journal entry for payment of the cash dividend is shown below:

Cash dividend payable A/c Dr     $1,548 million

      To Cash                                                              $1,5480 million

(Being payment is made for cash dividend)

Final answer:

The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares involve debiting retained earnings and crediting dividends payable on the declaration date, and debiting dividends payable and crediting cash on the payment date.

Explanation:

The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares would be as follows:

  1. Declaration Date:
  2. Retained Earnings DR $1,548,000 (8,600 million shares x $0.18 per share)
  3. Dividends Payable CR $1,548,000
  4. Payment Date:
  5. Dividends Payable DR $1,548,000
  6. Cash CR $1,548,000

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Crane Company Income Statement
For the Year Ended December 31, 2022
Sales revenue $ 145,200
Cost of goods sold 105,000
Gross profit 40,200
Selling expenses $10,800
Administrative expenses 3,600 14,400
Income from operations 25,800
Interest expense 1,800
Income before income taxes 24,000
Income tax expense 4,800
Net income $ 19,200
Additional data:
1. Depreciation expense was $10,500.
2. Dividends declared and paid were $12,000.
3. During the year equipment was sold for $5,100 cash.
This equipment cost $10,800 originally and had accumulated depreciation of $5,700 at the time of sale.
Prepare a statement of cash flows using the indirect method.

Answers

Answer:

statement of cash flows using the indirect method

Cash flow from Operating Activities

Cash Receipts from Customers                                          $145,200

Cash Paid to Supplies and Employees                             ($108,900)

Net Cash from Operating Activities                                     $36,300

Cash flow from Investing Activities

Proceeds from Sale of Equipment                                         $5,100

Net Cash from Investing Activities                                         $5,100

Cash flow from Financing Activities

Dividends Paid                                                                     ($12,000)

Net Cash from Financing  Activities                                    ($12,000)

Movement during the period                                             $29,400

Cash and Cash Equivalents at Beginning of the Period       0

Cash and Cash Equivalents at the End of the Period     $29,400

Explanation:

Cash Receipts from Customers Calculation :

Sales revenue $ 145,200

Assuming Cash Sales

Cash Paid to Supplies and Employees Calculation :

Cost of goods sold                                   $105,000

Add Selling Expenses                                 $10,800

Add Administrative expenses                      $3,600

Less Depreciation                                      ($10,500)

Cash Paid to Supplies and Employees   $108,900

Final answer:

The statement of cash flows for Crane Company using the indirect method starts with the net income and then adjusts for non-cash items such as depreciation and the gain/loss from equipment sale. The net Cash provided by operating activities would be $17,700. This method helps understand the cash movements within the company.

Explanation:

To prepare a statement of cash flows for Crane Company for the year ended December 31, 2022 using the indirect method, you first start with the net income from the income statement and then make adjustments for changes in non-cash items, add back depreciation expense (a non-cash item) and account for the gain/loss from the sale of equipment. The prepared statement would look like this:

  • Net Income: $19,200
  • Add: Depreciation Expense: $10,500
  • Add: Loss on Sale of Equipment (original cost - accumulated depreciation - sale price): ($10,800 - $5,700 - $5,100) = $0
  • Less: Dividends Paid: $12,000

The net Cash provided by operating activities would be $17,700 ($19,200 + $10,500 - $12,000). This method helps in revealing the sources and uses of cash within the company.

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Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 25%. The Federal Reserve buys a government bond worth $1,800,000 from Yakov, a client of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank.Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans)

Assets Liabilities

Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%.

Amount Deposited (Dollars) Change in Excess Reserves (Dollars) Change in Required Reserves (Dollars)
1,800,000

Answers

Answer:

a) First Main Street Bank's T-account (before the bank makes any new loans) will look as follows:

                  Assets                         |                Liabilities                  

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) The effect of a new deposit on excess and required reserves when the required reserve ratio is 25% are as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = $1,350,000

Change in Required Reserves (Dollars) = $450,000

Explanation:

a) Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans)

A deposit of $1,800,000 by Yakov into his checking account at First Main Street Bank will lead to the creation of both an asset and a liability for First Main Street Bank.

The reserves on the asset side of the T-account of First Main Street Bank will therefore increase by $1,800,000. This gives the bank the opportunity to able to give loan to its other customers from the additional reserves.

On the other hand, the deposit of $1,800,000 by Yakov will be recorded as a demand deposit on the liability side of the T-account of First Main Street Bank. This is because it is possible for Yakov to withdraw his deposit at any time.

This transaction will therefore be reflected as follows:

                  Assets                         |                Liabilities                  

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%.

Note: See the attached excel file to see how the table will actually look.

The required reserve ratio of 25% implies that First Main Street Bank is required by law to hold 25% of the new reserves which in this case is the initial deposits from Yakov.

By calculating this, 25% of $1,800,00 is $450,000 and it indicates an increase of $450,000 in the required reserve of First Main Street Bank.

After deducting 25% from 100%, we have 75% left. And 75% of $1,800,000 is $1,350,000. This $1,350,000 is the excess reserves that First Main Street Bank can use to give loans to other customers.

The breakdown is therefore as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = 75% * $1,800,000 = $1,350,000

Change in Required Reserves (Dollars) = 25% * $1,800,000 = $450,000

The reserve ratio is part of the reservable liabilities that commercial banks should hold on to, rather than lending or investing.

What is a reserve ratio?

This is a requirement determined by the country's largest bank, the United States Federal Reserve. It is also known as the cash reserve ratio.

As per the information, the  calculation of the reserve ratio from the government bond:

\rm\,25\% \,of \,1,800,000 = 450,000\n\nExcess \; reserves = 1,800,000 - 450,000 = 1,350,000

Now, this 1,800,000 will be part of demand deposits on the Assets side, and on the liability side, it will form part of the reserves.

               Assets                         I               Liabilities                  

Reserves                   $1,800,000 |  Deposits             $1,800,000

Secondly, the required reserve to be maintained from the reserves is $450,000 and the excess reserve is $1,350,000 that can be utilised for lending loans to the Public.

Hence, the amount of reserve ratio that First Main street Bank will maintain is $450,000.

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LOL Music Store uses the perpetual inventory system to account for its merchandise. On November 17, it purchased $1,000 of merchandise with terms of 2/5,n/60. If payment is made on November 21. Demonstrate the required journal entry to record the payment.

Answers

Answer:

LOL Music Store

Journal Entry to record the payment:

November 21:

Debit Accounts Payable $1,000

Credit Cash $980

Credit Cash Discounts $20

To record the payment on account.

Explanation:

a) Data and Analysis:

November 17: Inventory $1,000 Accounts Payable $1,000

November 21: Accounts Payable $1,000 Cash $980 Cash Discounts $20

b) When LOL Music Store uses the perpetual inventory system to account for its merchandise, it debits the Inventory account instead of the Purchases account on November 17.  The credit entry goes to the Accounts Payable account.  On November 21, when payment is made, the Accounts Payable is debited while the Cash account and Cash Discounts are correspondingly credited.

Compared to a perfectly competitive firm having the same cost curves, a monopolistically competitive firm ________ output and ________ prices.

Answers

Answer:

Reduces

Raises

Explanation:

Compared to a perfectly competitive firm having the same cost curves, a monopolistically competitive firm reduces output and raises prices.

The topic that explains this is economic efficiency and resource allocation.