Equivalent units quantify the amount of labor put into a set quantity of tangible objects. You can simply multiply the quantity of physical goods by the amount of effort done on them to determine equivalent units. You would have one comparable unit for two objects that are 50% complete (2 x 50% = 1).
Explain about the equivalent unit?
Given the amount of direct materials, direct labor, and manufacturing overhead costs incurred during that time for the products that weren't yet completed, it is the number of finished units of a product that a corporation could have hypothetically produced.
The total of the costs added during this period and the initial work-in-progress costs divided by the equivalent units is the cost per equivalent unit. A corporation might have produced a certain number of equivalent units with a specific amount of raw materials, labor, and manufacturing costs.
For instance, if the materials for 500 units are finished, but only 40% of the direct labor and manufacturing overhead are finished, the comparable units are 500 for materials and 200 (40% of 500).
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With low wages and strict controls on speed and productivity, how do barbadian pink-collar workers in the informatics industry express their agency?.
Despite low wages and strict speed and production rules, Barb-adian "pink-collar" workers in the informatics sector demonstrate their agency through choices in attire and haircuts.
What do workers stand for?Employees represent brands when they interact with clients and customers, whether in person or, as is more likely at the moment. People will represent the brand and convey its message more effectively if they see their roles as extensions of the business.
What does it entail to speak for a business?A company's representative is an organization's organ or a person with the authority to act in the company's name before courts and other authorities, as well as to acquire rights and enter into agreements that are legally binding on the company.
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in the short run, a monopolist's economic profits multiple choice are always zero because consumers prefer to buy from competitive sellers. may be positive or negative depending on market demand and cost conditions. are always positive because the monopolist is a price-maker. are usually negative because of government price regulation.
Depending on the state of the market and the cost structure, a monopolist's economic earnings could be positive or negative in the short term.
Accounting earnings are significantly different from economic earnings, which are what stockholders actually make. In the beginning, GAAP accounting data was created for loan investors rather than equity investors. More than 30 modifications must be made to accounting results before economic earnings can be derived. These adjustments eliminate items that are disguised in the MD&A and footnotes of annual filings and plug gaps in GAAP accounting.
Economic earnings outperform accounting profits because, They are based on all of the financial data that is available. For all businesses, they are standardized. They give a truer picture of the underlying cash flows of the business. A corporation is not creating shareholder value if its economic earnings are negative.
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boats and bait has 59,000 shares outstanding that sell for a price of $55 per share. the stock has a par value of $2 per share. the company's balance sheet shows capital surplus of $90,000 and retained earnings of $130,000. if the company declares a stock dividend of 20 percent, what is the new common stock value on the balance sheet?
The new common stock value on the balance sheet will be $141,600
It is given that boats and bait have 59,000 shares outstanding that are sold for a price of $55 per share. First, we will find out the common stock value on the balance sheet prior to the dividend
=> No. of stock outstanding * Face value per share.
=> 59000 * 2
=> $118,000
The stock dividend is 20%. So, to find the new shares to be issued we can solve:
=> 59000 * 20%
=> 59000 * 0.2
=> 11,800 shares
Now we will have to find out the total stock outstanding after the dividend. This can be calculated by:
=> 59000 + 11800
=> 70,800 Shares
The value of common stock after the stock dividend will be
=> 70,800 * 2
=> $141,600
Hence, the common stock value will be $141,600 after the dividend.
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the boeing 767 airplane was the result of a partnership between engineers from a variety of firms in a variety of countries. this type of working together is called a
Collaboration Team gathers a group of associates who join their forces to break a problem or complete a task. The focus is on a group trouble and how to figure out the result as a collaborative.
What is collaboration team ?For illustration, during brainstorming sessions, platoon members are in the same room( or same videotape call), agitating an issue and trying to fix an issue is team collaboration. Cooperative platoon is made of experts in colourful fields. They work side by side to negotiate the company’s pretensions.
But, each of them also brings a unique perspective to the table. So, whenever a company has to make a pivotal decision, experts can
1. Express their professional viewpoint on a subject matter,
2. Use their own moxie and experience to help, and
3. Suggest a result to the problem consequently.
4. When the time comes to reach a decision, there will have to be one collaborative mind – one common decision.
There’s an illustration.
The XYZ company wants to produce an sanctioned website. So, the company operation decides to gather their platoon of experts to come up with the stylish result.
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80% of people starting a business use their own personal savings. What is the advantage to this strategy versus using bank loans and credit cards? A. You control how the money is spent B. You will not pay interest on the capital. C. You do not have any risk of losing your money.
An advantage of using personal savings instead of bank loans and credit cards is you will not pay interest on the capital. (option B)
What is personal savings?Personal savings is the wealth that a person has accumulated over a period of time. When a person uses his personal savings to start a business, the person would not have to pay interest on the money used in the business because the funds used belongs to the person.
Banks loans and credit cards are subject to interest payment over the duration of the loan. Interest would increase the cost of starting the business. Funds that are gotten either from bank loans or personal savings can be lost if the business is not successful. Also, three is an opportunity cost associated in using the funds for starting a business. Opportunity cost is the cost of the next best option forgone when one option is chosen over other options.
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when perfect price discrimination is used, a barriers to entry are lost. b consumer surplus is maximized. c the firm breaks even. d prices are maximized. e there is no deadweight loss.
The company aims to maximize producer surplus.There is no surplus for consumers.There is no loss of deadweight.For each unit purchased, everyone pays the highest price they are willing to pay.
How do you select the ideal price differential?
Since the monopoly's pricing policy allows it to capture all of the consumer surplus, perfect price discrimination has CS equal to zero.PS is the area above and below the demand curve, or PS = (1/2)($1000 per unit - $100 per unit)450 units = $202,500.
Because the marginal revenue curve and the market demand curve coincide in perfect price discrimination, the monopolist will also produce until marginal cost equals the price of the product.
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While the use of data and information are important in most businesses, there are also a variety of considerations regarding the protection of customers’ privacy, security, and confidentiality as this information is stored for future use. Explain and identify how and why businesses can and should approach the use of data with privacy, security, and confidentiality in mind.
The reason why businesses can and should approach the use of data with privacy, security, and confidentiality in mind is because they need to protect the data of clients from the cyber thieves.
What is the importance of protecting data privacy?The importance of protecting data privacy is that the client can sue the firm in case the their data is been stolen from the firm.
It should be noted that the privacy, security, and confidentiality with respect to the data management is very essential for the image of the company so that the client can trust the company with their important data now and in the future.
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They must safeguard customer data from online thieves, organizations can and should approach the usage of data with privacy, security, and confidentiality in mind.
What is data and information?Data and information are not the same things, despite the fact that they are commonly used interchangeably. There are small differences between these components and how they work. Data refers to individual facts, whereas information refers to how those facts are organized and interpreted.
Data is a solitary unit made up of simple parts with no clear purpose. Information is a group of facts that, when considered collectively, have a logical significance. Data can exist without information. Data are reliant on knowledge.
Thus, They must safeguard customer data from online thieves.
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inancial information is presented below: operating expenses $ 42,000 sales returns and allowances 12,000 sales discounts 3,000 sales revenue 165,000 cost of goods sold 96,000 gross profit would be
Net income - After taking into account all the information provided, the pretax income on the income statement would be $12,000.
Net income (NI), often known as net earnings, is calculated by deducting sales from cost of goods sold, selling, marketing and administration expenditures, operational expenses, amortization, interest, taxes, and other expenditures. Investors can determine how much a company's revenue exceeds its costs by looking at its net income number.
Operating costs are subtracted from gross income to determine net income.
Details $
sixteen thousand five hundred dollars in sales.
Purchase Discount (3,000)
Sales adjustments and returns (12,000)
One hundred fifty thousand dollars in net sales
Charge for Sold Goods (96,000)
54,000 in gross income
operational costs (42,000)
Operating to Net Income Ratio: 12,000
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dan picked up his friend rodney to drive to their softball game. both dan and rodney have a personal auto policy (pap) with $5,000 of medical payments coverage. dan hit a parked car, and rodney was injured, incurring $9,000 of medical expenses. how will this claim be settled under the other insurance provision of the pap?
Dan's insurance would pay nothing because the expense is not covered by a third-party accident claim. Dan's insurer would pay $0 and Rodney's insurer would pay the whole $3500.
What is insurance?
Insurance is a form of financial protection in which, in exchange for a fee, one party undertakes to compensate another party in the case of a specific loss, damage, or injury. It is a type of risk management that is primarily used to mitigate the risk of a dependent or uncertain loss. An insurer, insurance business, insurance provider, or underwriter is a company that offers insurance. A policyholder is a person or entity who purchases insurance, whereas an insured is a person or entity who is covered by the policy. Policyholder and insured are frequently used interchangeably, although they are not synonymous, because coverage might occasionally extend to extra insureds who did not purchase the insurance.
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john is the annuitant in a variable plan, and sue is the beneficiary. upon john's death during the accumulation period, sue takes a lump-sum payment. what is her total tax liability?
Considering the tax policy and the situation of John and Sue, the total tax liability for Sue is the "proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate."
What is Tax liability?Tax Liability is a term that is used to describe the aggregate amount of tax debt owed by individuals, corporations, or other taxable entities.
Example of Tax Liability includes the following:
Income taxes, Sales tax, Capital gains tax, etc.In this case, given that Sue who is a beneficiary will be taxed at normal income rates during the year the lump sum is received.
Therefore, it is concluded that the amount that Sue will be taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment.
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Alpha Software Inc. made an advance rent payment of $6,000 for its warehouse. The accounting period for which the company paid the rent was
from January to June 2014. The accountant recorded a rent payment of $1,000 in the month of January, 2014. Which accounting principle guides
this action?
The accrual basis approach, which recognizes costs when they are incurred regardless of when they were paid, is the accounting concept guiding this activity.
What is the principle of dual aspect ?
According to the "dual aspect" idea, every business transaction has an equal and opposing influence on two separate parts of the company. In order to produce accurate and trustworthy financial accounts, all accounting systems rely on this idea, which serves as the cornerstone of double-entry accounting.
According to the dual aspect notion, in order to accurately depict the movement of funds, the accounting records must reflect the fact that every transaction has two outcomes. For instance, a buyer may pay cash for an item they acquire, and a seller may receive cash for an item they sell.
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Having just one typo on your résumé can eliminate you from a job pool. please select the best answer from the choices provided t f
This assertion is accurate. A single error on your resume can disqualify you from consideration for a position.
Describe a resume.When applying for a job and attending an interview, a resume is a necessary document. Information on a candidate who has applied for any position within a company is provided on this resume.
The resume includes details on a person's personal and professional qualifications, including their education level, skills, and background.
Your resume is a tool that an employer can use to form an opinion of you and develop a sense of who you are as a person. Any typing error can result in deletion because it presents a poor image of the employer.
In addition to this, there is software available today that can readily detect spelling and grammar errors and disqualify a candidate based on that.
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vroom developed two decision trees to help managers decide how much subordinate participation to allow. one decision tree is to be used when the decision must be made quickly. when should the second decision tree be used? when the cost of making a bad decision is high when the goal is to help subordinates improve their decision-making skills when the subordinates are able to make a decision on their own
The second decision tree be used when the subordinates are able to make a decision on their own. Decision trees categorise instances by arranging them in a tree from the root to a leaf node.
The best and most widely used technique for categorization and prediction is the decision tree. In a decision tree, which resembles a flowchart, each internal node indicates a test on an attribute, each branch shows the test's result, and each leaf node contains the class name.
When presented with two or more options, a choice is an act of selecting or making a decision. A decision is described as a conclusion or resolution made after consideration. A circumstance that calls for a decision is referred to as a decision-demanding situation. In the decision circumstance, a decision is clearly necessary, and the decision maker must start by defining the issue and engaging in the decision-making process.
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in companies that provide defined benefit plans, if the funding is inadequate to pay the benefits promised, the employees must make up the shortfall. question 8 options: true false
It is false that in companies that provide defined benefit plans, if the funding is inadequate to pay the benefits promised, the employees must make up the shortfall
What is benefit plans?A benefit plan, can as well be regarded as the pension plan, which is been used in the provision of the guaranteed retirement benefits that is been agreed to be paid to the employees over a period of time.
It should be noted that this Defined benefit plans is been put into consideration so as to help the employee from the employer and it been been fully funded by the employers.
In conclusion the this plan do come along with the retirement payouts most of the time and it is been paid using some of the agreed methods with the consideration about the employee's salary as well as the age and tenure which define the relationship that both the employer as well as the company is having.
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tiffany scott puts $8,000 into a load mutual fund. she knows that her up-front sales charge is 5%. how much of her money actually goes to buy shares in the mutual fund?
Total of $ 7,600 of her money will go to buy shares in the mutual fund when tiffany scott puts $8000 into a load.
What is a mutual fund and how much money will go to buy shares in the mutual fund?A mutual fund is an investment firm consisting of bonds, stocks and other entities and is all managed by professionals.There are four types of mutual funds namely bond funds, stock funds, money market funds, and target date funds.Here the question is asked about how much of her money will go to buy the shares in the mutual fund.Her up- front sales charge is 5%, and it is believed that lower the up-front sale charges greater the ongoing expenses.Hence she will have to put $7,600 of her money to buy shares in the mutual fund.To know more about mutual fund visit:
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when an organization uses a name, phrase, design, symbols, or a combination of these to identify products and distinguish them from its competitors, it is engaged in blank . multiple choice question. segmentation positioning perceptual mapping branding
When an organization uses a name, phrase, design, symbols, or a combination of these to identify products and distinguish them from its competitors, it is engaged in Branding.
What is product branding?
Product branding can be defined as then way in which companies tend to make use of unique name, unique design, unique specification among others that will help to differentiate their product from the product of others.
Product branding is essential for every companies that produces or manufactures a product based on the fact that branding a product can makes them to stand out from others who sell the same product as their but do not brand theirs.
Product branding is a form of marketing strategic use by manufacturing companies as it help to attract potentials customers to their product.
Therefore we can conclude that product branding is vital
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which of the following would the manufacturer find to be the lowest acceptable price for the new supercowchow per sack: a) $60 b) $70 c) $80 d) $90 e) $100
The lowest acceptable price for the new supercowchow per sack is $60.
Throw light on the concepts of demand and supply.The two major economic theories are combined in the law of demand and the law of supply to determine how do the changes in the price of a resource, good, or service have an impact on its supply as well as demand. Supply rises as the price increases, but demand for. a good or service drops. In contrast, as the price of a good or service falls, supply is constrained and demand is increased.
Many medieval thinkers saw a distinction between a "fair" price based on costs and equitable returns and one at which the sale was actually conducted, much like modern critics of market pricing for some commodities.
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The complete question is given below :
When administered according to a careful feeding schedule, a premium nutritional additive called Supercowchow increases milk production earnings in a dairy herd to $1,050,000 from the $1,000,000 using the standard Cowchow that costs $50 a sack for the farmer to buy. The farmer uses 1,000 sacks of Cowchow a year. Supercowchow costs $10 per sack extra to manufacture and the farmer would use 1,000 sacks of it. Thus the added-value of Supercowchow over regular Cowchow is $50,000/1,000 sacks, which is $50 per sack.
Which of the following would the manufacturer find to be the lowest acceptable per sack price for the new Supercowchow?
a. $60
b. $70
c. $80
d. $90
e. $100
suppose your monthly net income is $2,400. your monthly debt payments include your student loan payment and a gas credit card. they total $360. what is your debt payments-to-income ratio?
Debt payments-to-income ratio is 3 : 20.
What is a debt?Debt is money you owe and credit is money you can borrow. You create debt by borrowing money on credit. Borrowed: Obligation unable to pay his debt. The most important types of personal debt are secured debt, unsecured debt, revolving debt and mortgages. Secured debt requires some form of guarantee, while unsecured debt is based solely on personal creditworthiness. A debt is a financial obligation or obligation owed by one person, the debtor, to another creditor.A loan (creditor or lender) to repay that money.To learn more about debt from the given link :
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you own three call option contracts on janecek stock with a strike price of $32 per share and an option premium of $.55 per share. what is the total intrinsic value of these options today if the stock is currently selling for $32.65 per share?
If the stock is currently trading at $32.65 per share, the total intrinsic value of these options is $195. Here, is the attached solution.
INTRINSIC VALUE= INTRINSIC VALUE PER UNIT*LOT SIZE*NO. OF LOTS
=0.65*100*3
=$195
What is Intrinsic Value?
An asset's value is determined by its intrinsic value. This metric is determined using an intricate financial model or an objective computation. The intrinsic value of an asset is distinct from its present market value. Investors can determine if an asset is overvalued or undervalued by comparing it to its current price.Cash flow is used in financial analysis to ascertain a company's or stock's intrinsic, or underlying, value. The difference between the option's strike price and the underlying asset's current market price is known as the intrinsic value in the pricing of options. Calculating intrinsic, or true, value can be done in a variety of methods.Many intrinsic value employ discounted cash flow analysis.To know more about Intrinsic Value visit:
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You need to give every dollar a name. Why is this important? what might happen if you don‘t have a plan for every dollar you make?.
It is important to give every dollar a name because of zero-based budget. The greatest way to budget is with a zero-based budget since no money is wasted and every dollar has a purpose. if you don‘t have a plan for every dollar you make your money may be wasted and lead to increase in expense and resource misallocation. The zero-based budget intentionally assigns a name to each dollar before the month even starts.
Explain zero-based budget.With zero-based budgeting (ZBB), instead of starting with the prior budget and making adjustments as needed, all expenses must be justified for a new period or year starting from zero. Zero-based budgeting has many benefits as an accounting technique, including targeted operations, decreased expenses, budget flexibility, and strategic execution. Managers become more aware of the top revenue-generating operations when they consider how each dollar is spent. Zero-based budgeting, on the other hand, may minimize resource misallocation that could occur over time when a budget develops incrementally, which could lead to reduced expenses.
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has an insurance policy that cannot be cancelled unless he fails to pay his premium when due. which provision in his insurance policy would specify this?
A non-forfeiture option is a clause in some life insurance policies that says the policyholder will not lose the policy's value if they don't pay their premiums within a certain time frame.
In an insurance policy, what exactly is a non-forfeiture option?An insurance policy's nonforfeiture clause says that an insured person can get full or partial benefits or a partial refund of premiums if they don't pay their bills. Nonforfeiture clauses may be included in policies for long-term care insurance, long-term disability insurance, and permanent life insurance.
Which three kinds of nonforfeiture options are there?Policyowners can use or pay out the cash values in these ways. There are three options for nonforfeiture:
the payment of cashinsurance with lower premiumslong-term insurance. When the policy is surrendered, the policyowner has the option of requesting a cash payment equal to the cash values.Learn more about Nonforfeiture clauses here:
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Sarah has shared with noel that they are part of their manager’s ingroup. What argument can she use to convince noel of the correctness of her perception?.
They have higher performance ratings than others in their department. This argument she can use to convince noel of the correctness of her perception
The time period 'department' can refer to a number of various things. as an example, an administrative division inside a nation, a governmental ministry or even a part of an group. on this specific definition, we confer with the time period 'branch' because it's used to refer to separate divisions of an enterprise.
A branch is normally understood as a part of a bigger organization. The time period 'branch' can also cowl a extensive style of meanings, from e.g. a geographical or administrative division within a rustic, to a governmental ministry or a part of an organization, together with a university.
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How are payroll taxes different from personal income taxes? question 4 options: tax consumption rather than wealth increase the purchasing power of consumers rather than decreasing it reduce the demand for harmful goods rather than increasing this demand pay for specific social programs rather than general government activities
D. pay for specific social programs rather than general government activities shows the difference between payroll taxes and personal income tax.
What distinguishes payroll taxes from personal income taxes?
Who pays which and what the taxes fund are the primary distinctions between income and payroll taxes. Employers and employees both contribute to the funding of Social Security, Medicare, and other social insurance programmes through payroll taxes. Employees pay local income taxes to support public services including defence, education, and transportation.
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asset turnover kroger co., a national supermarket chain, reported the following data in its financial statements for a recent year: total revenue $10,512,000 total assets at end of year 3,350,000 total assets at beginning of year 3,220,000 a. compute the asset turnover. round to one decimal place.
The asset turnover ratio, commonly referred to as the total asset turnover ratio, gauges how effectively a business utilises its assets to generate revenue.
Total assets on average equal (1550000+1490000/2)
What is mean by asset turnover?Net Sales / Average Total Assets equals the asset turnover ratio.
It is the gross sales for a certain time period less any customer-taken discounts, allowances, or refunds. Make sure the net sales figures are taken from the same period when comparing the asset turnover ratios of several organizations.
Features of asset turnover:
A company's sales or revenues are compared to the value of its assets using the asset turnover ratio. The asset turnover ratio can be used to gauge how effectively a business uses its assets to produce income.
A company's sales or revenues are compared to the value of its assets using the asset turnover ratio.
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what is a form of predictive analytics for marketing campaings that attempts to identify target markets or people who could be convinced to buy products?
A form of predictive analytics for marketing campaigns that attempts to identify target markets or people who could be convinced to buy products is uplift modeling.
What is uplift modeling?Uplift modeling is a causal learning approach for estimating individual treatment effects in an predictive analytics.Using experimental data, end users can calculate the incremental impact of treatments (such as direct marketing) on predictive analytics.Uplift means to lift something upwards or to give someone a mental, spiritual or emotional uplift.Forcing someone to lift their head by tilting their chin up is an example of how you wake up.Uplift modeling is an analytics-based marketing approach that predicts the direct impact of marketer behavior on predictive analytics.Uplift generally divides its target market into his four sectors: Sure Things, Lost Causes, Persuadable and Sleeping Dogs.To learn more about uplift modeling from the given link :
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an asset is exchanged for another asset and cash is received in the transaction. the fair value of the assets are not determinable. at what amount should the new asset be recorded? multiple choice question. historical cost of the asset given up less the cash received. book value of the asset received less the cash received. book value of the asset given up less the cash received. cash received plus the book value of the asset given up.
The new asset should be recorded in the amount of book value of the asset given.
Any resource that a company or other economic organisation owns or controls is considered an asset in financial accounting. Anything that has the potential to provide positive economic value qualifies. The ownership value that can be turned into cash is represented by assets. The monetary value of an organization's assets is shown on its balance sheet. It protects cash and other assets that belong to a person or a company. Tangible and intangible assets are the two main categories into which assets can be divided. Different subclasses of tangible assets exist, including fixed and current assets. Cash, inventories, and accounts receivable are examples of current assets, whereas land, structures, and machinery are examples of fixed assets.
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the dominant theory concerning who owns the rights to water that flows across or borders a parcel of land that permits all such owners to use all the water needed as long as the use does not deprive other owners is known as
The dominant theory owners is known as Riparian rights doctrine.
The required details about Riparian rights doctrine is mentioned in below paragraph.
According to the riparian doctrine, the owner of the land that borders a body of water is the one who has the right to that water. Owners of riparian land are allowed to use the water in a reasonable manner so long as it does not unreasonably interfere with other riparian rights holders' ability to utilize the water in a fair manner. The mechanism of distributing water among individuals who own land along its course is known as riparian water rights. It was developed from English common law. Many countries with a common law tradition, including Canada, Australia, and eastern US states, have riparian water rights. A corporation made up of the landowners on the coast that technically owns the water area and a partition unit that consists of them are three ways that common land ownership might be established.
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raynah is frustrated because the feedback she received from her manager didn't explain why she was being demoted. which criterion for effective performance management is missing from barb's feedback?
Specificity can be described as the criterion that has to do with performance management that is missing from the feedback that Barbs has given.
What is specificity?This is the term that has to do with the particular reason that would tell us the reason why something is being done. Specificity has to do with the idea that once there is an issue then there has to be a particular reason that would be pinpointed to tell the reason for such.
In this case, the demotion has happened and there is no feedback. The right thing would be to tell her the reason why she is demoted and the ways that she would be able to make amends.
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a small county wants to increase its real gdp from $18,000 to $36,000. if they want this to happen in 5 years, what rate of growth do they need to have each year?
The country needs a growth rate of 10% every year.
What is the Growth Rate?The annual growth rate is a helpful indicator of investment patterns. In a poll of nearly 200 senior marketing managers, The Marketing Accountability Standards Board found that 69% of respondents thought the average annual growth rate was a meaningful indicator. The preceding year is the starting point for the algorithm used to determine the annual growth rate. The compound annual growth rate (CAGR) is typically regarded as an appropriate statistic for determining average growth rates across longer time frames.
Difference in GDP = $36,000 - $18,000
Difference in GDP = $18,000
then the rate = 18000 /36000 × 100
rate = 50%
this rate is to be acquired in 5 years
hence for every year = 50% / 5 = 10%
Hence, the growth rate every year should be 10%
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suppose that the consumption function is c = $500 + 0.8yd, where yd is disposable income. if income increases by $2,000, consumption will increase by:
c = $2100.
The consumption based on the given function is $2100.
Explain consumption function?The relationship between consumer spending and the various factors influencing it is known as the consumption function in economics. At the level of the household or family, these variables may include wealth, interest rates, age, education, and family size. They may also include expectations about the level and riskiness of future wealth or income.C = c+bY is described by the consumption function equation. The value of total consumption will rise if the value of (By) is higher. It clearly states that as income rises, expenses must follow suit. We must take into account the fact that the rate of income growth exceeds the rate of expenditure growth.Consumption grows by the MPC times an increase in income for every dollar of income. As a result, the MPC is the slope of the consumption function.Given here,
Disposable income = $2,000.
The consumption equation ,c= 500 + 0.8yd
We could calculate consumption by adding the following to the equation: c= 500 + 0.8yd
c = 500 + 0.8(2000)
c = 500 + 1600
c = 2100
∴ The consumption is $2100 as a result.
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