While both Ben & Jerry's and Chick-fil-A are known for their activism efforts, their respective stances and values have elicited different responses from stakeholders. Ben & Jerry's socially active stance has generally been met with support from customers, government entities, and community activists who share similar values. On the other hand, Chick-fil-A's conservative stance has garnered support from its customer base but has faced pushback from some government entities and community activists who oppose its values.
One company that is known for its conservative stances is Chick-fil-A. Chick-fil-A has been vocal about its conservative values, particularly regarding issues. Let's evaluate how stakeholders, including customers, government entities, and community activists, have responded to Chick-fil-A's activism efforts compared to Ben & Jerry's socially active stance.
1. Customers:
- Ben & Jerry's: Ben & Jerry's socially active stance has resonated with its customer base, particularly those who align with their progressive values. Many customers appreciate the company's commitment to social and environmental causes, and it has garnered a loyal following.
- Chick-fil-A: Chick-fil-A's conservative stance has also attracted a dedicated customer base that aligns with its values. Many customers appreciate the company's traditional values and have continued to support the brand despite controversies and boycott calls from some groups.
2. Government Entities:
- Ben & Jerry's: Ben & Jerry's activism efforts have generally received support or minimal pushback from government entities. Their focus on social and environmental causes often aligns with certain government policies or initiatives related to sustainability and social justice.
- Chick-fil-A: Chick-fil-A has faced some challenges from government entities, particularly in locations where its conservative stance on clashes with local laws or policies. In some cases, there have been attempts to block or limit the company's expansion based on disagreements with its values.
3. Community Activists:
- Ben & Jerry's: Ben & Jerry's activism efforts have been well-received by many community activists who share similar values. The company's partnerships with grassroots organizations and initiatives have often been seen as genuine and effective in driving positive change.
- Chick-fil-A: Chick-fil-A's conservative stances have faced significant opposition from community activists, particularly those advocating for rights and equality. There have been boycotts and protests organized against the company, and some activists have actively campaigned against its presence in certain communities.
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Auger Ambit Limited is a manufacturing company which sets prices based on total
costs plus mark-up. For the year ending 31 December 20X3 the company is forecasting total fixed
costs of 788,000€. Direct materials costs will be 18.00€ per unit and direct labour costs will be
27.56€ per unit. The company expects to produce 20,000 units, and normally looks for a profit mark-
up of 25%.
Suggest a suitable cost-based selling price per unit of product for 20X3
Auger Ambit Limited is a manufacturing company that sets prices based on total costs plus mark-up. For the year ending 31 December 20X3 the company is forecasting total fixed costs of 788,000€.
Direct materials costs will be 18.00€ per unit, direct labor costs will be 27.56€ per unit, and the company expects to produce 20,000 units, and normally looks for a profit mark-up of 25%.To determine the cost-based selling price per unit of product for 20X3, the following formula will be used:Selling price = Total cost per unit + Mark-up per unitTotal cost per unit = Direct materials costs per unit + Direct labor costs per unit + Fixed costs per unitFixed cost per unit = Total fixed cost / Number of units producedFixed cost per unit = 788,000 / 20,000= 39.4€ per unitTotal cost per unit = Direct materials costs per unit + Direct labor costs per unit + Fixed costs per unitTotal cost per unit = 18€ per unit + 27.56€ per unit + 39.4€ per unitTotal cost per unit = 84.96€ per unitMark-up per unit = 25% of Total cost per unitMark-up per unit = 25% * 84.96€ per unitMark-up per unit = 21.24€ per unitSelling price per unit = Total cost per unit + Mark-up per unitSelling price per unit = 84.96€ per unit + 21.24€ per unitSelling price per unit = 106.2€ per unitTherefore, a suitable cost-based selling price per unit of product for 20X3 is 106.2€ per unit.
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Bonds With A Face Value Of $440000 And A Quoted Price Of 102.25 Have A Selling Price Of
(a) $448910
(b) $449900
(c) $448811
(d) $528990
The selling price of bonds with a face value of $440,000 and a quoted price of 102.25 would be $448,910. So the correct option is (a).
Bonds are debt instruments issued by governments, corporations, and other organizations to raise capital. When an entity issues bonds, it is essentially borrowing money from investors. Bonds typically have a fixed face value (also known as the par value or principal), a stated interest rate (known as the coupon rate), and a maturity date. Investors who purchase bonds become creditors of the issuing entity and are entitled to receive periodic interest payments and the return of the principal amount at maturity. Bonds can be bought and sold in the financial markets.
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17)Understand the concepts of equal opportunity, diversity management and work-life balance 18)Appreciate the global challenges to multinational corporations in developing and implementing equality and diversity management strategies" 19) Differentiate perspectives of ethics and corporate social responsibility 20)Explain how ethical employment practices can contribute to sustainable business success and social development
17) Understand the concepts of equal opportunity, diversity management, and work-life balanceEqual opportunity is a term that refers to the chance to obtain a job and progress professionally regardless of one’s gender, ethnicity, and socio-economic status.
Diversity management refers to the process of creating an inclusive workplace that embraces diversity and leverages it to improve the company’s operations. Work-life balance involves ensuring that employees have enough time to engage in activities outside the office without affecting their job performance.18) Appreciate the global challenges to multinational corporations in developing and implementing equality and diversity management strategiesDeveloping and implementing equality and diversity management strategies can be a daunting task for multinational corporations. Some of the challenges include language barriers, cultural differences, varying legal frameworks in different countries, and the sheer size of the organization. Additionally, diversity policies and strategies that work well in one country may not be as effective in another.19) Differentiate perspectives of ethics and corporate social responsibilityCorporate social responsibility (CSR) is a broad concept that involves the actions taken by a company to contribute to the welfare of society. It refers to the idea that businesses should take responsibility for their impact on society. Ethics, on the other hand, involves the principles and values that underpin the behavior of individuals and organizations. Ethics relate to questions of right and wrong, and they play a crucial role in the behavior of a business.20) Explain how ethical employment practices can contribute to sustainable business success and social developmentEthical employment practices can contribute to sustainable business success and social development in various ways. For instance, they can help build a positive reputation for the company, improve employee morale and productivity, and reduce the risk of lawsuits and fines. Ethical practices can also contribute to social development by promoting fair labor practices and improving working conditions for employees. By doing so, they can help alleviate poverty and promote social justice.
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17) Understanding the concepts of equal opportunity, diversity management, and work-life balance: Equal opportunity refers to the practice of providing all people with equal access and opportunities to jobs, education, and other resources, regardless of their race, gender, religion, or any other factor. Diversity management refers to the practice of creating an inclusive workplace culture that values differences in race, ethnicity, gender, sexual orientation, age, and other factors. Work-life balance refers to the practice of balancing the demands of work and personal life in a way that allows individuals to pursue both effectively.
18) Appreciating the global challenges to multinational corporations in developing and implementing equality and diversity management strategies: Multinational corporations (MNCs) operate in various countries, each with its cultural norms and attitudes toward diversity and equality. This poses a challenge for MNCs to create effective equality and diversity management strategies that meet the unique needs of each location. In addition, legal requirements regarding equality and diversity vary widely from country to country, and MNCs must comply with the regulations in each location.19) Differentiating perspectives of ethics and corporate social responsibility: Ethics refer to the principles that guide decision-making, behavior, and relationships in a business environment. Corporate social responsibility (CSR) refers to a company's efforts to create a positive impact on society, the environment, and its stakeholders. Ethics are often seen as a subset of CSR, as ethical decision-making is a fundamental component of responsible business practices.20) Explaining how ethical employment practices can contribute to sustainable business success and social development: Ethical employment practices, such as paying fair wages, providing safe working conditions, and promoting diversity and inclusion, can lead to higher employee satisfaction, motivation, and retention. This can result in increased productivity and profitability, contributing to sustainable business success. Ethical employment practices can also have a positive impact on the wider community, by promoting social development through job creation, skills development, and economic growth.
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Using all possible sources of information including
the case, the Internet, and direct contact with heavy
farm equipment machinery dealers, develop what you
think the decision-making unit looks like for a heavy
farm equipment machinery purchase, such as a trac-
tor. Does its size depend on the size of the company
or other factors? Explain.
A decision-making unit (DMU) is a group of individuals who are involved in the process of purchasing goods and services. The DMU includes people who have decision-making authority and those who influence the decision-making process.
In the case of a heavy farm equipment machinery purchase, such as a tractor, the DMU would likely include several individuals, including the owner or manager of the farm, the farm's chief mechanic, and the financial officer. In some cases, a sales representative from the equipment dealership may also be included in the DMU, particularly if the purchase is complex or requires a significant investment.
When it comes to the size of the DMU, larger companies may have a larger group of decision-makers involved in the process, due to the complexity of the purchase and the potential for multiple departments to be impacted by the decision. Smaller companies may have a smaller DMU, with fewer individuals involved in the decision-making process.
Overall, the DMU for a heavy farm equipment machinery purchase, such as a tractor, will likely include several individuals with different roles and responsibilities. The size of the DMU will depend on a variety of factors, including the size of the company, the complexity of the purchase, and the level of involvement required from each member of the team.
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Consider a two-period endowment economy. There are N consumers and a government in this economy. Consumers have preferences for current and future consumption given by: « (c,c) = Inc+ B Inc, 0
A two-period endowment economy is an economy in which each person has a certain amount of a commodity in each period, which may be the same or different.
The economy's consumers and government prefer present and future consumption according to the preferences for current and future consumption given below.« (c,c) = Inc+ B Inc, 0 and (c2, c2) = Inc2+ B Inc2, 0 Where B is the intertemporal elasticity of substitution (IES) and I is income in each period. The term Inc+BInc is the expected utility of consumption at each period t. The economy's budget constraint must be satisfied in each period t, and there are N consumers and a government in this economy. The budget constraint for each individual is as follows. c + s ≤ Inc, c2 + s2 ≤ Inc2, s ≥ 0, and s2 ≥ 0The government's budget constraint is defined as follows. G + sG ≤ I1 + I2, where G is government spending and sG is government savings in each period.The market-clearing condition is defined as follows. c + c2 + G = ∑I+ sN + sN2, where sN and sN2 are the savings of consumers in each period. The Arrow-Debreu equilibrium is obtained when all individuals and the government are satisfied with their choices in each period, taking into account the market-clearing condition and the budget constraints.Therefore, a two-period endowment economy is a market in which all agents have specified endowments of commodities in each period and trade to maximize their utility. The Arrow-Debreu equilibrium is a state in which all agents have made optimal decisions given the market price system and their endowments.
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Below is the production possibility schedule for an economy.
Max. Annual output options Quantity of potatoes (pounds) Quantity of fish (pounds)
A 1000 0
B 800 300
C 600 500
D 400 600
E 200 650
F 0 675
Is it possible to produce 500 lbs fish and 800 lbs potatoes? Why or why not? Explain. (2 marks) What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs? (1 mark) What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 lbs? (1 mark) Suppose the economy is producing 800 lbs of potatoes & 300 lbs of fish. What is the opportunity cost of producing 350 lbs of more fish? (1 mark) Is the combination 600 lbs potatoes & 400 lbs fish efficient? Why or why not? Explain your answer. (2 marks)
Answer:
As per the production possibility schedule for an economy. The answers for the questions are as follows:
Explanation:
1) It is not possible to produce 500 lbs of fish and 800 lbs of potatoes. According to the production possibility schedule provided, the maximum annual output for fish at any given level of potato production is 675 lbs (option F). Therefore, it is not within the production possibilities of the economy to simultaneously produce 500 lbs of fish and 800 lbs of potatoes.
2) The opportunity cost of increasing the annual output of potatoes from 600 lbs to 800 lbs can be calculated by examining the change in fish production. Moving from option C (600 lbs of potatoes, 500 lbs of fish) to option B (800 lbs of potatoes, 300 lbs of fish), the opportunity cost is a reduction in fish production of 200 lbs.
3) The opportunity cost of increasing the annual output of potatoes from 200 lbs to 400 lbs can be determined by analyzing the change in fish production. Transitioning from option E (200 lbs of potatoes, 650 lbs of fish) to option D (400 lbs of potatoes, 600 lbs of fish), the opportunity cost is a decrease in fish production of 50 lbs.
4) If the economy is producing 800 lbs of potatoes and 300 lbs of fish, and there is an increase of 350 lbs in fish production, the opportunity cost can be calculated by examining the change in potato production. The transition from option B (800 lbs of potatoes, 300 lbs of fish) to option C (600 lbs of potatoes, 500 lbs of fish) results in a reduction of potato production by 200 lbs. Therefore, the opportunity cost of producing 350 lbs more fish is a decrease in potato production by 200 lbs.
5) The combination of 600 lbs of potatoes and 400 lbs of fish is not efficient. Efficiency in this context means utilizing resources in a way that maximizes output. Looking at the production possibility schedule, option B (800 lbs of potatoes, 300 lbs of fish) demonstrates a higher output for both potatoes and fish compared to the combination of 600 lbs of potatoes and 400 lbs of fish. Therefore, production possibility schedule for an economy.
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Compare and contrast the idea that the people who should pay for the costs of improving the environment are those who are responsible and those who would benefit.
Two theories regarding the cost of improving the environment: those responsible for environmental harm should pay vs. those who benefit from environmental improvements should pay.
There are two main schools of thought regarding who should pay for the cost of improving the environment: those who are responsible and those who would benefit. The two theories are compared and contrasted below:Those who are responsible:Those who are responsible for causing environmental harm should pay for the costs of improving the environment. Industries that pollute the environment, for example, should be required to pay a fine for their actions. This money may then be used to repair any damage that has been done to the environment. While this system holds businesses accountable for their actions, it also punishes those who depend on these businesses for work. This is because the fines levied on businesses may raise their costs, making it more difficult for them to remain in business. In the long run, this may result in a reduction in the number of jobs available to people.Those who would benefit:Those who will benefit from environmental improvements should pay for the costs of making them. The theory behind this argument is that if someone benefits from something, they should be willing to pay for it. For example, if someone wants to enjoy clean air, they should be willing to pay for the cost of reducing pollution. The advantage of this system is that it distributes the cost of environmental improvement more equitably. On the other hand, it may also place a heavy burden on low-income earners who cannot afford to pay the cost of environmental improvement. As a result, environmental benefits may only be available to those who can afford to pay for them.
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Government survey takers determine that typical family expenditures each month in the year designated as the base year are as follows:
- 20 pizzas, $10 each
- Rent of apartment, $600 per month
- Gasoline and car maintenance, $100 per month
- Phone service (basic service plus 10 long-distance calls), $50 per month
In the year following the base year, the survey takers determine that pizzas have risen to $11 each, apartment rent is $640, gasoline and maintenance have risen to $120, and phone service has dropped in price to $40.
Instructions: Enter your responses by rounding the CPI to three decimal places and the rate of inflation to one decimal place.
(a). Find the CPI in the subsequent year and the rate of inflation between the base year and the subsequent year.
(b). The family's nominal income rose by 5 percent between the base year and the subsequent year. Are they worse off or better off in terms of what their income is able to buy?
The rate of inflation is higher than the increase in nominal income, the family is worse off in terms of what their income is able to buy. The increase in income is not enough to keep up with the rising prices, resulting in a decrease in their purchasing power.
(a) To find the CPI in the subsequent year and the rate of inflation, we need to calculate the cost of the basket of goods in the subsequent year and compare it to the cost in the base year.
Cost of basket of goods in the base year:
20 pizzas * $10 each = $200
Rent = $600
Gasoline and car maintenance = $100
Phone service = $50
Total cost in the base year = $200 + $600 + $100 + $50 = $950
Cost of basket of goods in the subsequent year:
20 pizzas * $11 each = $220
Rent = $640
Gasoline and car maintenance = $120
Phone service = $40
Total cost in the subsequent year = $220 + $640 + $120 + $40 = $1,020
CPI in the subsequent year = (Total cost in the subsequent year / Total cost in the base year) * 100
CPI = ($1,020 / $950) * 100 = 107.368 (rounded to three decimal places)
Rate of inflation = ((CPI in the subsequent year - CPI in the base year) / CPI in the base year) * 100
Rate of inflation = ((107.368 - 100) / 100) * 100 = 7.368% (rounded to one decimal place)
(b) The nominal income rose by 5 percent between the base year and the subsequent year. To determine if the family is better off or worse off in terms of what their income can buy, we need to compare the rate of inflation with the increase in nominal income.
Rate of inflation = 7.368%
Increase in nominal income = 5%
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Samsung Corporation produces a single product. The standard costs for one unit of its product are as follows: Direct materials (6 pounds at $0.50 per pound) $3 Direct labor (2 hours at $10 per hour) 20 Variable manufacturing overhead (2 hours at $5 per hour) 10 During November, 8,000 units were produced. The costs associated with November operations were as follows: Material purchased (36,000 pounds at $0.60 per pound) $21,600 Material used in production (28,000 pounds) Direct labor (18,400 hours at $9.75 per hour) 179,400 Variable manufacturing overhead incurred 110,400 What is the variable overhead spending variance for the product for November? A $30,400 Favorable $ 30,400 Unfavorable $ 18,400 Unfavorable $ 18,400 Favorable
Correct option is $30,400 unfavorable.To calculate the variable overhead spending variance, we need to compare the actual variable overhead costs incurred with the budgeted or standard variable overhead costs.
Standard variable overhead cost per unit:
Variable manufacturing overhead per unit = $10
Variable manufacturing overhead per hour = $5
Variable manufacturing overhead hours per unit = 2 hours
Standard variable overhead cost per unit = Variable manufacturing overhead per unit + (Variable manufacturing overhead per hour * Variable manufacturing overhead hours per unit)
= $10 + ($5 * 2)
= $10 + $10
= $20
Actual variable overhead cost for November = Variable manufacturing overhead incurred = $110,400
Variable Overhead Spending Variance = Actual variable overhead cost - (Standard variable overhead cost per unit * Units produced)
= $110,400 - ($20 * 8,000)
= $110,400 - $160,000
= -$49,600
The variable overhead spending variance for the product for November is -$49,600, indicating an unfavorable variance. Therefore, the correct answer is $30,400 unfavorable.
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Question 10 out of one If retained earnings at the beginning of the 2020 is 500,000, overstatement in 2019 income statement is 50,000, niet income for 2020 * 54,000 w dividend for 2020 is zero Ino dividend dedared). How much is retained earnings at the end of 2020, Answers A. 600,000 B. 500,000 c. 400,000 D. 100,000 Tout of po Question 8 In accounting for disposal of assets, accumulated depreciation refers to Answers: А Fair value of assets B. Total depreciation since acquisition of the asset c Book value less total depreciation D. Depreciation expenses in the year of sale Question 4 1 out of 1 pc An asset was bought in 2015 at a purchase price of 70,000 AED. Depreciation is 10% annually. After 5 years, what is the asset's historical cost) Answers A 105.000 8. 63,000 C 35,000 0.70,000
If retained earnings at the beginning of the 2020 is 500,000, overstated in 2019 income statement is 50,000, net income for 2020 is 54,000 w/ dividend for 2020 is zero (no dividend declared).
To determine the retained earnings at the end of 2020, we need to use the formula: Retained Earnings = Retained earnings at the beginning of the year + Net Income - Dividends (or Declared Dividends).Given that, Retained earnings at the beginning of the year = 500,000Overstatement in 2019 income statement = 50,000Net income for 2020 = 54,000Dividend for 2020 = zero
Therefore, Retained Earnings = 500,000 + 54,000 - 0- 50,000= 504,000Thus, the retained earnings at the end of 2020 is 504,000. Answer: More than 100 words.
In accounting for the disposal of assets, accumulated depreciation refers to: In accounting for the disposal of assets, accumulated depreciation refers to the book value less total depreciation on the asset. Accumulated depreciation is the cumulative amount of depreciation that has been charged on the asset from the date of purchase until the date of disposal of the asset. It is a contra-asset account that is used to reduce the book value of the asset on the balance sheet. The accumulated depreciation is added to the original cost of the asset to determine the book value of the asset. When the asset is sold or disposed of, the accumulated depreciation is subtracted from the original cost of the asset to determine the gain or loss on disposal.
Question 4:An asset was bought in 2015 at a purchase price of 70,000 AED. Depreciation is 10% annually. After 5 years, what is the asset's historical cost?To calculate the historical cost of an asset, we need to know the purchase price and the total depreciation that has been charged on the asset.
The total depreciation charged on the asset can be calculated by multiplying the depreciation rate by the purchase price.
Given that, Depreciation rate = 10%Purchase price = 70,000 AED After 5 years, the total depreciation charged on the asset is: Total depreciation = Depreciation rate x Purchase price x Number of years= 10% x 70,000 x 5= 35,000 AED Therefore, the historical cost of the asset after 5 years = Purchase price - Total depreciation= 70,000 - 35,000= 35,000 AED Thus, the historical cost of the asset after 5 years is 35,000 AED.
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Answer each of the following questions as either true or false. For a statement to be "true," it must always be true. If there is at least one case where the statement is not true, answer "false." You must justify each answer with an appropriate explanation or counterexample (which may include a relevant diagram).
(a) In an oligopoly model where firms choose prices for a homogeneous product and have constant (but different) marginal costs, there is a Bertrand-Nash equilibrium in which both firms make sales to customers.
(b) In an oligopoly model where firms choose quantities for a homogeneous product and have constant (and identical) marginal costs, an increase in the number of firms causes the market price to fall.
(c) For both perfect competitors and monopolies, a firm’s marginal revenue is equal to the price of the good that the firm sells: if corn costs $6 per bushel and the firm sells one more unit, then revenue rises by $6.
a) FalseAn oligopoly model where firms choose prices for a homogeneous product and have constant (but different) marginal costs doesn't have a Bertrand-Nash equilibrium in which both firms make sales to customers.
In this scenario, the firms will attempt to undercut each other, resulting in a price war that will drive the price down to marginal cost, and both will sell an equal amount of output at this price.b) TrueIn an oligopoly model where firms choose quantities for a homogeneous product and have constant (and identical) marginal costs, an increase in the number of firms causes the market price to fall.
When more firms are competing for the same customers, each firm's market share decreases, resulting in a decrease in the market price.c) FalseFor both perfect competitors and monopolies, a firm's marginal revenue is not equal to the price of the good that the firm sells. Marginal revenue is the additional revenue that a firm generates when it sells one more unit of the product.
When a firm sells an additional unit, the price that it receives is determined by the demand curve, which means that the marginal revenue is equal to the price of the good minus the change in total revenue resulting from the sale of the additional unit. Hence, the correct statement is that the firm's marginal revenue is equal to the price of the good minus the change in total revenue resulting from the sale of the additional unit.
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Consider the perfectly competitive firm described by the short run cost curves in the figure below. 20 L MC 18 ATC AVC 16 14 12 10 8 6 4 2 05 10 15 20 25 30 35 40 45 50 Price and cost (dollars per mug) Quantity (mugs per day) If the price of the firm's output is $10, how many mugs should be produced in the short run? O Zero mugs Between 31 and 40 mugs, inclusive O Between 20 and 30 mugs, inclusive O More than 40 mugs Between 1 and 19 mugs, inclusive
In the figure given, the perfectly competitive firm has the short run cost curves. For the firm to be in the short run, the firm can increase production if there is an increase in price.
The price of the firm's output is $10. The firm should produce at a point where the marginal cost (MC) intersects with the marginal revenue (MR), and the cost of producing one more unit of output is equal to the revenue generated by selling that unit of output. At this level of output, the firm makes the highest profit. The profit-maximizing quantity of output in the short run is 30 mugs per day. When producing 30 mugs per day, the ATC curve intersects the MR curve at the lowest point of the ATC curve as shown in the diagram. At the level of output corresponding to the intersection of the marginal revenue and marginal cost, the firm produces 30 mugs in the short run. Answer: Between 20 and 30 mugs, inclusive.
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1.
What is "just peace"? Why do you think "just peace" is critical in
post-conflict peacebuilding?(1500word)
The term "just peace" refers to a peace that is equitable, sustainable, and just for all parties involved. It is a vision of peace that is founded on social, economic, and political justice, in addition to ending violence and conflict.
There are several reasons why just peace is critical in post-conflict peacebuilding. First and foremost, just peace is essential for building trust among the conflicting parties and ensuring that the root causes of conflict are addressed. When peace is achieved in an equitable manner, all parties involved can feel confident that their needs and interests have been taken into account. This helps to prevent any future grievances and disputes.
Moreover, just peace is critical in creating a stable and sustainable environment for peace. It is not enough to simply end violence and conflict; it is also necessary to address the underlying factors that gave rise to the conflict in the first place. This includes issues such as poverty, inequality, and discrimination. Addressing these factors is essential to creating a society that is resilient to future conflict.
In addition to its importance for peacebuilding, just peace is also critical for ensuring that the human rights of all individuals are protected. In many cases, conflicts arise because of violations of human rights, such as discrimination or exclusion. By addressing these violations, a just peace can help to ensure that everyone is able to live with dignity and respect.
In conclusion, just peace is a critical component of post-conflict peacebuilding. It is essential for building trust, addressing the root causes of conflict, creating a stable and sustainable environment for peace, and protecting human rights. Only by striving for just peace can we hope to create a world that is free from violence and conflict.
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Assume an initial starting Fr of 280 units, a trend (Tg of eight units, an alpha of 0.30, and a delta of 0.40. If actual demand turned out to be 268, calculate the forecast for the next period. (Round your answer to 1 decimal place.)
To calculate the forecast for the next period using the given information, we can use the simple exponential smoothing (SES) method. Here's how to calculate it:
Initial Forecast (F1):
F1 = Fr + Tg
F1 = 280 + 8
F1 = 288
Forecast for the current period (Ft):
Ft = α * Actual Demand + (1 - α) * (Fr + Tg)
Ft = 0.30 * 268 + (1 - 0.30) * (280 + 8)
Ft = 0.30 * 268 + 0.70 * 288
Ft = 80.4 + 201.6
Ft = 282
Therefore, the forecast for the next period is 282 units.
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TOPIC DISCUSSION 2 Discuss the following, Macy's Inc. was established in 2009, in the early 2020s, Macy's Inc. was in a consolidation/cost-cutting mode. During these years, with the focus on cost-cutting, Macy's customer service suffered. Many sales associates weren't providing the level of service that customers wanted. Now, Macy's top management decided to grow the company. However, Macy's top management knew that growth would not occur without a big improvement in how its sales associates treated customers. To produce the improved customer service Macy's needed to work herd, The question was, what should Macy's do about it? Talk About it (Discussion): What other human resource management steps do you think Macy's should take in order to improve customer service performance? Question 1 Based on the course content, please mention and detail 4 human resource management steps you think Macy's should take in order to improve customer service performance? (8 marks). Question 2 Oral discussion (2 marks). Instructions: • The paper will be corrected and the same score will be given to the whole group. Therefore, please make sure that ideas are not repeated in the same paper, and I encourage everyone to review the paper before submitting. • In order to ensure that everyone has worked on the paper, I'm going to discuss the part that each student wrote with her, the student marks on oral discussion be given individually. • I hope to answer by a clear explanation from the student's concept, without cutting and pasting from the Internet, at least three pages. . Please upload your answer in a Microsoft word or PDF format. • The deadline is on Wednesday 13th of April. +
Macy's should create a positive work environment where employees feel valued and appreciated. This will improve employee morale and lead to better customer service.
Macy's should take a few human resource management steps to improve customer service performance, including:
1. Hire and train employees: Macy's should make it a point to hire and train the best employees for the job. These employees should be properly trained in all aspects of customer service and store operations.
2. Establish employee goals: Macy's should establish employee goals that are focused on customer service. Employees should be aware of what is expected of them and how they can meet these expectations.
3. Reward employees for good customer service: Macy's should create a system of rewards for employees who provide excellent customer service. This will motivate employees to work harder and provide better service.
4. Encourage customer feedback: Macy's should encourage customers to provide feedback on their shopping experience. This feedback can be used to improve customer service and store operations.
5. Provide ongoing training: Macy's should provide ongoing training to its employees to keep them up-to-date on the latest customer service techniques and store operations.
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a user is interested in creating an object to create a stock inventory at a grocery store. which of the following would be appropriate attributes of an object that they may use? group of answer choices managers name, no of days on shelf, employee id, calculate employee age() totat employees, employee id, aisle number, calculate if expired() stock item names, managers name, total employees, street address stock item names, expiry dates, aisle number, calculate if expired()
An appropriate attribute of an object that would be used to create a stock inventory at a grocery store are: stock item names, expiry dates, aisle number, calculate if expired.
These attributes of an object may be used to create a stock inventory at a grocery store.
What is an object?
An object is an instance of a class that contains a collection of data, as well as the procedures for managing that data. It's an instance of a class. It's a software entity that stores information in the form of variables. The attributes of an object include variables, fields, and properties.
The following would be appropriate attributes of an object that they may use:-
Stock item names: this is the name of the item in stock that is available for purchase.-
Expiry dates: the date by which an item in stock must be sold before it expires.-
Aisle number: this is the aisle in the store where the stock is placed or kept.-
Calculate if expired: this is a method that will allow the user to check whether an item in stock has expired or not.
Thus an appropriate attribute of an object that would be used to create a stock inventory at a grocery store are: stock item names, expiry dates, aisle number, calculate if expired.
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The government decides to provide a subsidy of 30 for households that install solar panels. The market demand for solar panels is given by: p=300-2Q and the market supply by p=30+ Q and the Following the imposition of the subsidy the total price paid to sellers including the subsidy increases by deadweight loss that results from the subsidy is equal to
The government decides to provide a subsidy of 30 for households that install solar panels. The deadweight loss that results from the subsidy is equal to $225.
In order to calculate the deadweight loss that results from the subsidy, we can follow these steps:
Step 1: Calculate the equilibrium price and quantity without the subsidy.The market demand for solar panels is given by: p = 300 - 2Q. The market supply for solar panels is given by: p = 30 + Q. Setting demand equal to supply gives :300 - 2Q = 30 + QQ = 135P = 300 - 2Q = 30 + QP = $210 (equilibrium price)Q = 135 (equilibrium quantity)
Step 2: Calculate the new equilibrium price and quantity with the subsidy. The subsidy of $30 will shift the supply curve to the right by $30. The new supply curve will be :p = 60 + Q. Demand remains the same: p = 300 - 2QSetting demand equal to the new supply gives:300 - 2Q = 60 + QQ = 120P = 300 - 2Q = 60 + QP = $180 (new equilibrium price)Q = 120 (new equilibrium quantity)
Step 3: Calculate the deadweight loss. The deadweight loss from the subsidy is the loss of producer and consumer surplus. It can be calculated as the triangle formed by the points:($210, 135), ($210, 120), and ($180, 120).The base of the triangle is the difference in quantity between the two equilibrium points:135 - 120 = 15The height of the triangle is the difference in price between the two equilibrium points:$210 - $180 = $30
Therefore, the area of the triangle (and the deadweight loss from the subsidy) is:0.5 x 15 x $30 = $225Therefore, the deadweight loss that results from the subsidy is equal to $225.
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Suppose tax payers are given rebates on previous tax payments. What would happen if they spend all those rebates today? (Remember AD=Y= C+I+G+X-M) a. Aggregate Demand shifts to the right O b. Aggregate Demand shifts to the left Oc. Nothing since money is neutral O d. Long Run Aggregate supply shifts to the right
According to the question The correct option is a. Aggregate Demand shifts to the right.
If taxpayers are given rebates on previous tax payments and they choose to spend all those rebates today, it would result in an increase in consumption expenditure (C) in the economy. Consumption is a component of Aggregate Demand (AD), which represents the total spending in an economy.
By increasing consumption expenditure, the overall level of Aggregate Demand would shift to the right. This means that the total spending in the economy increases, leading to higher levels of output (Y).
Therefore, the correct answer is option a: Aggregate Demand shifts to the right.
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H Price in dollars 25 20 15 MSB 10 5 0 H 0 1 2 3 4 5 6 7 8 9 10 11 Smoke detectors (millions per year) Refer the the graph above to answer the following quesitons: a. Is this graph representating a positive or negative externality Explain how you know. (1 points) b. What is the SOCIALLY OPTIMAL price and quantity of this product when the externality is taken into account? (1 points) c. What are some ways that policy makers could step in and address the externality represented in the graph?
a. The given graph represents a negative externality as the social cost of producing smoke detectors is greater than its private cost. In the graph, MSB (Marginal Social Benefit) is shown at $25 and the cost of producing a smoke detector is $15, which is shown as H on the vertical axis.
Hence, the social cost is $10 more than the private cost ($25-$15) and it creates a negative externality.
b. The socially optimal price and quantity are shown at a point where Marginal Social Benefit (MSB) is equal to Marginal Social Cost (MSC). In the given graph, the socially optimal quantity is where the Marginal Social Benefit (MSB) curve intersects with the Marginal Social Cost (MSC) curve, which is Q* of smoke detectors. This is also known as the socially optimal level of output. Here, the socially optimal price is $20 per unit as the MSB curve intersects the vertical axis at this point. So, the socially optimal price and quantity are $20 and 5 million respectively.
c. Policy makers can take several steps to address the negative externality represented in the graph, which are as follows:i) Tax: A tax can be imposed on producers of smoke detectors to make them consider the social cost of production and to produce less than the market equilibrium quantity.ii) Subsidy: A subsidy can be provided to consumers to encourage them to purchase smoke detectors and increase their quantity demanded.iii) Regulation: The government can regulate the production of smoke detectors and set the emission standards to reduce the amount of harmful substances produced.iv) Public education: Public education programs can be initiated to educate consumers about the harmful effects of smoke detectors and how to dispose of them properly.
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You are studying arrest rates among people formerly convicted of crimes. You are interested in the effects of unemployment spells, measured in months, and wealth, measured in 1000s of Euros, on criminal activity. You expect that longer unemployment spells increase a person's criminal activity, but that this effect is mitigated by the person's wealth. You estimate the following regression model: arrest = 0.417 + 0.006*unemployment – 0.020*wealth – 0.0037*wealth* unemployment a. Does the model confirm your expectation? b. What is the effect of unemployment when wealth is 1000 Euros? c. What is the effect of unemployment when wealth is 2000 Euros?
a. The model supports the expectation that the positive relationship between unemployment and criminal activity is weakened by wealth. b. arrest rates are expected to rise by 0.0023 ; c. arrest rates are expected to decline by 0.0014.
a. Model confirm expectation: The model estimates that long unemployment spells can increase criminal activity, but this effect is mitigated by wealth.
The positive coefficient of unemployment implies that an increase in unemployment duration increases arrest rates.Similarly, the negative coefficient of wealth suggests that an increase in wealth reduces arrest rates. Finally, the negative coefficient of the interaction term implies that as the duration of unemployment increases, the effect of wealth on reducing arrest rates weakens.b. Effect of unemployment when wealth is 1000 Euros:
When wealth is 1000 Euros, the equation of the regression model is as follows:
arrest = 0.417 + 0.006*unemployment – 0.020*1000 – 0.0037*1000* unemployment
= 0.417 + 0.006*unemployment – 0.02 – 0.0037*1000*unemployment
= -0.020 + 0.006*unemployment - 3.7*10^-3*unemployment
= 0.0023* unemployment
Since the coefficient of unemployment is positive, arrest rates are expected to rise by 0.0023 for every additional month of unemployment when wealth is 1000 Euros.
c. Effect of unemployment when wealth is 2000 Euros:
When wealth is 2000 Euros, the equation of the regression model is as follows:
arrest = 0.417 + 0.006*unemployment – 0.020*2000 – 0.0037*2000* unemployment
= 0.417 + 0.006*unemployment – 0.04 – 0.0074*unemployment
= -0.040 + 0.006*unemployment - 0.0074*unemployment
= -0.0014* unemployment
Since the coefficient of unemployment is negative, arrest rates are expected to decline by 0.0014 for every additional month of unemployment when wealth is 2000 Euros.
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What kind of management accounting system or practices would a consumer durables marketing organization that operates on both a direct selling and a retail marketing platform use?
and how they will use it
A consumer durables marketing organization that operates on both a direct selling and a retail marketing platform would use a hybrid management accounting system.
This system would combine traditional accounting practices with modern data analytics to improve decision making and optimize business processes.
The hybrid management accounting system would incorporate a range of practices to support the company's operations.
Firstly, it would use traditional accounting methods such as cost accounting, budgeting, and financial reporting to ensure effective control and governance of the company's finances.
Secondly, it would incorporate modern data analytics tools and techniques to provide insights into customer behavior, sales trends, and inventory management.
These insights would help the company to develop targeted marketing campaigns, optimize pricing strategies, and effectively manage inventory levels to minimize waste and maximize profits.
Overall, the hybrid management accounting system would help the organization to operate efficiently and effectively on both direct selling and retail marketing platforms.
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1. What types of decision-making and strategic information should the AIS provide in the expenditure cycle?
2. Explain what is meant by the expenditure cycle as a "mirror image" of the revenue cycle.
1.The AIS (Accounting Information System) should provide decision-making and strategic information related to the expenditure cycle, including information about vendor selection, purchase authorization, payment processing, and cost analysis.
2.The "mirror image" concept refers to how the expenditure cycle is the reverse process of the revenue cycle, involving activities such as purchasing goods or services, receiving and verifying them, recording the transaction, and making payments.
1.In the expenditure cycle, the AIS should provide decision-making and strategic information to support various activities. This includes information about vendor selection, such as vendor performance data and pricing comparisons, to aid in making informed purchasing decisions. The AIS should also provide information related to purchase authorization, ensuring that proper approval processes are followed and preventing unauthorized purchases.
Additionally, the AIS should offer payment processing information, tracking payment due dates, discounts, and payment terms to optimize cash flow management. Cost analysis information is also crucial, providing insights into expenditures and enabling comparisons against budgets or historical data to control costs effectively.
2.The expenditure cycle and revenue cycle are often considered as "mirror images" of each other. While the revenue cycle involves activities related to selling goods or services, the expenditure cycle deals with the purchasing of goods or services. The mirror image concept emphasizes the reversal of processes in the expenditure cycle compared to the revenue cycle.
For example, in the revenue cycle, sales orders are recorded, goods or services are delivered, and revenue is recognized. In the expenditure cycle, purchase orders are recorded, goods or services are received and verified, and expenditures are recognized. The mirror image relationship helps to understand the flow of transactions and the corresponding activities between the two cycles.
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5. When evaluating and prioritizing projects, we may use the weighted scoring method in addition to financial analysis because: a financial analysis is precise, whereas weighted scoring method is not. b. weighted scoring method can handle qualitative factors, which may not be estimated numerically as required in financial analysis. c. financial analysis may not be accurate, whereas weighted scoring method is very accurate. d. Both methods are equally good. We only need to use either one, not both. - 2 6. In the PMI project management methodology, Human Resources, Procurement, Risk and Communications management are classified as facilitating knowledge areas because: a. these are easier to manage than the other knowledge areas. b. these require sponsor's approval and the other knowledge areas do not. c. these are more important than the other knowledge areas. d. these are normally not considered as the success criteria of projects. 7. Which of the following statements is correct about cost baseline? a. It is the result of the cost estimating process. b. It is based on the Earned Value Management method. c. It is the same as the time baseline. d. It includes the original budget plus any approved changes to costs. 8. Which of the following statements is/are true about residual and secondary risks? (1) There will always be residual risks, but not necessarily secondary risks. (2) Secondary risks cannot be avoided whereas residual risks can be (3) Both of these risks are the results of some risk response strategies. a. (1) only. b. (2) only. (1) and (3) only. d. (1), (2) and (3) c.
5. The weighted scoring method can handle qualitative factors in financial analysis (option B).
6. In the PMI methodology, Human Resources, Procurement, Risk, and Communications are facilitating knowledge areas (option A).
7. The cost baseline includes the original budget and approved cost changes (option D).
8. Residual risks are always present, while secondary risks can be avoided (option A).
5. The correct answer is option b. The weighted scoring method can handle qualitative factors that may not be estimated numerically as required in financial analysis.6. The correct answer is option a. In the PMI project management methodology, Human Resources, Procurement, Risk, and Communications management are classified as facilitating knowledge areas because these are easier to manage than the other knowledge areas.7. The correct answer is option d. The cost baseline includes the original budget plus any approved changes to costs.8. The correct answer is option a. Residual risks will always be present, but not necessarily secondary risks. Secondary risks can be avoided, but residual risks can't. Both of these risks are the results of some risk response strategies.
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After reading HR Planning today 6.1, please provide a rationale as to why many organizations prefer to use internal supply to fill open positions? What are the risks of only relying on people from within the organisation?
Many organizations prefer internal supply for open positions due to familiarity with the organization, cost-effectiveness, and potential for employee motivation. Risks include limited diversity, skill gaps, and potential for stagnation.
Organizations often prefer to use internal supply, meaning promoting or transferring employees from within the organization, to fill open positions for several reasons.
Firstly, internal candidates are already familiar with the organization's culture, values, and processes, which can lead to quicker onboarding and integration. Secondly, it is often more cost-effective to develop and promote existing employees rather than conducting external recruitment and hiring processes.
Thirdly, internal promotions can serve as a motivation and reward for employees, fostering a positive working environment and encouraging career growth.
However, relying solely on internal supply carries risks. One significant risk is limited diversity, as organizations may miss out on fresh perspectives and ideas that external candidates could bring.
Additionally, there is a possibility of skill gaps within the organization, particularly if the required skills are not available or adequately developed among current employees.
Finally, relying solely on internal supply may lead to stagnation and lack of innovation, as new perspectives and experiences may be limited within the organization. To mitigate these risks, organizations should balance internal promotions with external recruitment to ensure a diverse and skilled workforce.
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A company purchased an asset for $3,400,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project? Multiple Choice
a. $3,148,060
b. $251,940
c. $2,266,780
d. $0 $755,480
The correct answer is (b) $251,940.To calculate the book value of the equipment at the end of the project, we need to determine the depreciation for each year and subtract it from the original cost.
Year 1 depreciation: $3,400,000 * 33.33% = $1,133,320
Year 2 depreciation: $3,400,000 * 44.45% = $1,511,300
Year 3 depreciation: $3,400,000 * 14.81% = $503,540
Total depreciation over the 3-year project: $1,133,320 + $1,511,300 + $503,540 = $3,148,160
The book value of the equipment at the end of the project is the original cost minus the total depreciation:
Book value = $3,400,000 - $3,148,160 = $251,840
Therefore, the book value of the equipment at the end of the project is $251,940
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Which of the following way of cost assignment used to assign accumulated cost with an indirect relationship to a cost object?
(A) Cost accumulation
(B) B Cost allocation
(C) Cost assignment
(D) Cost tracing
The correct answer is (B) Cost allocation.
Cost allocation is the method used to assign accumulated costs with an indirect relationship to a cost object. It involves allocating or distributing costs to various cost objects based on a systematic and logical basis. This method is employed when there is no direct or easily measurable cause-and-effect relationship between the cost and the cost object.
Cost accumulation refers to the process of collecting costs and recording them in a systematic manner, which may involve the use of cost accounts or cost centers.
Cost assignment refers to the process of assigning accumulated costs to cost objects. This can be done through cost allocation or cost tracing.
Cost tracing, on the other hand, is the method of directly assigning costs to a specific cost object by tracing the actual consumption or usage of resources.
In the context of assigning accumulated costs with an indirect relationship to a cost object, cost allocation is the appropriate method. It allows for the fair distribution of costs among multiple cost objects, even when the relationship is not easily measurable or direct.
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8. The office was completed and ready for occupancy on July 1. To help pay for construction, $720,000 was borrowed on January 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2010 was a $300,000, 12%, 6-year note payable dated January 1, 2010. The actual interest cost incurred during 2010 was A $100,800 B. $90000 C. $50000 D. $84000 9. Ortiz Co. had the following account balances: Sales $ 120,000 Cost of goods sold 60,000 Salary expense 10,000 Depreciation expense 20,000 Dividend revenue 4,000 Utilities expense 8,000 Rental revenue 20,000 Interest expense 12,000 Sales returns 11,000 Advertising expense 13,000 What would Ortiz report as total expenses in a single-step income statement A. $123,000 B. $127,00 C. $134,00 D. $63,00 10. Jamar Company purchased a depreciable asset for $150,000. The estimated salvage value is $10,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset? A. $17,500 B. $26,250 C. $28,125 D. $37,500
8. The actual interest cost incurred during 2010 is $64,800. None of the given options matches this amount.
9. Ortiz would report total expenses of $134,000 in a single-step income statement. The correct option is C.
10. the depreciation expense for the second year on this asset is $28,125. The correct option is C.
For the given questions:
8. The actual interest cost incurred during 2010 can be calculated by multiplying the borrowed amount by the interest rate. The formula for interest cost is Principal x Interest Rate.
Principal = $720,000
Interest Rate = 9%
Interest Cost = $720,000 x 9% = $64,800
Therefore, the actual interest cost incurred during 2010 is $64,800. None of the given options matches this amount.
9. To calculate total expenses, we need to add up all the expenses mentioned in the question.
Total Expenses = Cost of goods sold + Salary expense + Depreciation expense + Utilities expense + Interest expense + Sales returns + Advertising expense
Total Expenses = $60,000 + $10,000 + $20,000 + $8,000 + $12,000 + $11,000 + $13,000
Total Expenses = $134,000
Therefore, Ortiz would report total expenses of $134,000 in a single-step income statement. The correct option is C.
10. The double-declining balance method is used to calculate depreciation expense. It involves multiplying the asset's book value by a predetermined rate that is double the straight-line depreciation rate.
Depreciation Rate = (1 / Useful Life) x 2
Depreciation Expense (Second Year) = Book Value (Beginning of Year) x Depreciation Rate
Book Value (Beginning of Year) = Purchase Cost - Accumulated Depreciation
Purchase Cost = $150,000
Estimated Salvage Value = $10,000
Estimated Useful Life = 8 years
Straight-Line Depreciation Rate = (1 / 8) = 0.125
Double-Declining Balance Depreciation Rate = 2 x 0.125 = 0.25
Year 1 Depreciation Expense: $150,000 x 0.25 = $37,500
Book Value (Beginning of Year 2) = Purchase Cost - Year 1 Depreciation Expense
Book Value (Beginning of Year 2) = $150,000 - $37,500 = $112,500
Depreciation Expense (Second Year) = $112,500 x 0.25 = $28,125
Therefore, the depreciation expense for the second year on this asset is $28,125. The correct option is C.
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Implementation plan for better strategy
• How can the Emirates Airlines improve on their current
strategies?
• Which opportunities are not being fully taken advantage
of?
To improve its current strategies, Emirates Airlines can focus on the following key areas:
1. Enhancing customer experience: Invest in personalized services, improve onboard amenities, and provide seamless digital solutions to enhance passenger satisfaction.
2. Strengthening alliances: Forge strategic partnerships with other airlines to expand route networks, increase code-share agreements, and leverage customer loyalty programs.
3. Embracing sustainability: Implement eco-friendly practices such as reducing carbon emissions, investing in fuel-efficient aircraft, and adopting sustainable operations throughout the organization.
4. Expanding digital presence: Develop innovative digital platforms and tools to streamline booking processes, improve communication with customers, and enhance overall digital experience.
Emirates Airlines can improve its current strategies by prioritizing customer experience through personalized services, upgraded onboard amenities, and seamless digital solutions. Strengthening alliances with other airlines will help expand route networks, increase code-share agreements, and leverage customer loyalty programs.
The airline can also focus on embracing sustainability by implementing eco-friendly practices, reducing carbon emissions, investing in fuel-efficient aircraft, and adopting sustainable operations. Furthermore, expanding the airline's digital presence through innovative platforms and tools will streamline booking processes, improve customer communication, and enhance the overall digital experience for passengers. By focusing on these areas, Emirates Airlines can achieve improved strategy implementation and stay ahead in the competitive aviation industry.
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"Ridership always went up when bus fares came down, but the increased patronage never was enough to prevent a decrease in overall revenue."
A. The demand is inelastic.
B. The demand has unit elasticity.
C. The demand is elastic.
D. This quotation tells nothing about the elasticity of demand.
The correct answer is C. The demand is elastic. The quotation suggests that when bus fares are reduced, ridership increases, but this does not result in an overall increase in revenue. Based on this information, we can infer that the demand for bus rides is likely elastic.
When a decrease in price leads to a proportionally larger increase in quantity demanded, resulting in a decrease in overall revenue, it indicates that demand is elastic. In this scenario, the increase in ridership is not enough to offset the decrease in fare revenue, suggesting that consumers are highly responsive to changes in price.
When demand is elastic, a change in price has a significant impact on quantity demanded. Consumers are price-sensitive and respond by increasing their demand substantially when prices decrease. However, this increased demand does not fully compensate for the decrease in price, leading to an overall reduction in revenue.
In summary, the quotation suggests that the demand for bus rides is elastic because a decrease in fares results in a greater proportionate increase in ridership, but overall revenue decreases. This indicates that consumers are highly responsive to changes in price, making the demand elastic.
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Question 11 1 pts In chapter 6, students were introduced to the two good consumer utility model. In that model we were able to discuss the economic concepts of consumer substitution and income effects. The income and substitution effects in the model are result of a change in_______ budget set consumer income relative prices consumer preferences
The price changes that cause a change in consumer behavior, resulting in income and substitution effects, are relative prices.
The income and substitution effects in the model are a result of a change in relative prices in the consumer utility model. In chapter 6, two good consumer utility model was introduced and in that model we were able to discuss the economic concepts of consumer substitution and income effects. A consumer’s budget constraint in the two-good consumer utility model can be represented by the equation x1p1 + x2p2 = I, where x1 is the quantity of good 1, p1 is the price of good 1, x2 is the quantity of good 2, p2 is the price of good 2, and I is the consumer’s income. Income and substitution effects both arise from the fact that a change in price causes a change in the quantity of goods consumed by the consumer. The substitution effect of a price change measures the effect of a price change on the quantity of a good purchased when the consumer substitutes the good for other goods in response to the price change. The income effect of a price change measures the effect of a price change on the quantity of a good purchased when the consumer adjusts his or her consumption of all goods in response to the price change. The price changes that cause a change in consumer behavior, resulting in income and substitution effects, are relative prices.
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