Selling the inventory at the current prices would have brought $16,595,000 in contribution margin to Digby Corp in the year.
The amount an asset is worth is the market value of that asset. The amount an asset cost to acquire or manufacture is the book value of the asset. The balance sheet can report either the book values or the market values of assets, liabilities, and equity.
The inventory is worth $16,595,000. This figure represents the market value of inventory. Therefore, if they had sold their entire inventory at their current prices, the sale would have added $16,595,000 to their contribution margin.
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intermediaries add costs to products, but they also add such as convenience and assortment. t or f
True, intermediaries add costs to products, but they also add such as convenience and assortment.
What are financial intermediaries ?In every financial transaction, financial intermediaries operate as a middleman between two parties. A good illustration would be a bank, which performs a variety of functions, including acting as a go-between for lenders and borrowers and gathering cash for investments.
Banks and other financial intermediaries make it possible for capital to pass hands in a particular transaction. Typically, both the customer and the business pay a price for this. Physical storage and shipment require a lot of resources and time, adding to the transaction's expenses.
Hence, True is an appropriate response.
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Answer:
values or value
Explanation:
in the story of content video, to be successful with content marketing a brand needs a chief content manager and a commitment to:
Developing a company's content strategy, producing relevant and targeted content, and distributing marketing materials to people online are all necessary components of content marketing a brand.
Content managers create and share timely, pertinent content for viewers. In order to accomplish that, they effectively interact with customers by using their brand voice, which they have a thorough awareness of.
A content manager's responsibilities typically include overseeing projects and a team of content creators in addition to creative. For projects, they may also work together with members of other teams.
This is a position that requires a few years of experience in marketing, communications, and project management because content managers are typically expected to lead their teams and support growth.
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swanson company has two divisions; sporting goods and sports gear. the sales mix is 65% for sporting goods and 35% for sports gear. swanson incurs $6,660,000 in fixed costs. the contribution margin ratio for sporting goods is 30%, while for sports gear it is 50%. reference: ref 6-2 what will sales be for the sporting goods division at the break-even point? group of answer choices $5,400,000 $6,300,000 $10,067,442 $11,700,000
The fixed cost is specified as F = $6,660,000. sports items make up 65% of sales.
Which fixed costs come to mind?Rent and leasing charges, salary, energy prices, insurance, or loan repayments are a few examples of fixed costs. There are some taxes that are fixed costs as well, such as company licenses.
What are variable costs and fixed costs?The amount of product generated determines the fluctuation in variable costs. Raw materials, labor, and commissions are examples of variable expenses.No matter how much is produced, fixed costs are constant., fixed expenses stay constant. Lease and rental payments, reinsurance, and interest payments are examples of fixed costs.
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suppose that the manager of a company has estimated the probability of a super-event sometime during the next three years that will disrupt all suppliers as 2%. in addition, the firm currently uses four suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next three years to be 10%. supplier management costs during this period are $30,000 per supplier. the financial cost incurred if all four suppliers are disrupted at the same time is estimated to be $10,000,000. what is the expected monetary value (cost) of the current supplier diversification arrangement?
The expected monetary cost of the current supplier diversification arrangement is given as follows:
$317,600.
How to obtain the expected value of a discrete distribution?The expected value of a discrete distribution is obtained by the sum of each value multiplied by it's respective probability.
The probability of all suppliers being disrupted is of 2%, with a cost of $10,000,000, hence:
P(X = 10,000,000) = 0.02.
Otherwise, with no disruptions, the costs per year are of $30,000 per each of the four suppliers, hence a total of $120,000, thus:
P(X = 120,000) = 0.98.
Then the distribution is given as follows:
P(X = 120,000) = 0.98.P(X = 10,000,000) = 0.02.Thus the expected cost is calculated as follows:
E(X) = 0.98 x 120,000 + 0.02 x 10,000,000 = $317,600.
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if operating income is $60,000, average operating assets are $240,000, and the minimum required rate of return is 20%, what is the residual income?
if operating income is $60,000, average operating assets are $240,000, and the minimum required rate of return is 20%, what is the residual income would be $240,000*20/100= $48000.
What is required rate of return?
The minimal return an investor will take for holding a company's shares in exchange for taking on a certain amount of risk is known as the necessary rate of return.
The investor must also take into account his or her cost of capital, the return offered by other competing investments, and inflation in order to compute the RRR properly and increase its usefulness.
A retiree will have a lower risk tolerance and, as a result, be willing to accept a lesser return than an investor who just finished college and may have a larger stomach for risk. This is because the RRR is a subjective minimum rate of return.
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Some u.s. multinationals add a premium percentage for risk to the discount rate when evaluating potential foreign investments. Critics argue that this practice?a. heavily penalizes distant cash flows. b. fails to penalize early cash flows. c. fails to recognize early cash flows.d. penalizes early cash flows too heavily.
When assessing possible overseas investments, some multinational corporations in the United States punish early cash flows excessively harshly by adding a premium proportion for risk.
Defining "multinational:A global firm is a firm that operates in several different nations and maintains operations in at least one of those nations, typically through the operation of warehouses or distribution centers. Despite conducting business abroad, the company's native market remains its main priority.
Give a definition of multinationals and an illustration:MNCs offer their products and services in several countries, which calls for global management. Global corporations have a wealth of resources, a high staff turnover rate, and aggressive marketing. LTI, TCS, Hpcl, Pwc, and Capgemini are just a handful of the MNCs present in India.
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brick house cafe has a tax rate of 21 percent and paid total taxes of $56,000. the company had an interest expense of $24,900. what was the value of the interest tax shield?
When Brick House Cafe pays total taxes of $56,000 and has a tax rate of 21%, the interest tax shield is $5,229.
What is a interest tax shield?
The lower income taxes brought on by the deduction of interest expenses from taxable income are referred to as the "interest tax shield." For instance, because mortgage interest is deductible from income, mortgages may provide buyers with an interest tax shield.
Many middle-class people, whose residences make up a sizable portion of their net worth, benefit greatly from the option to use a mortgage as a tax shelter. 1 By giving the borrower a particular tax benefit, it additionally provides incentives to individuals wishing to purchase a home.
Taxpayers can utilize a tax shield as a deduction to lower their taxable income. Tax shelters include things like medical costs, mortgage interest deductions, charitable contribution deductions, and depreciation.
Interest tax shield = interest expenses * tax rate
= $24,900 * 21%
= $5,229
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In the iowa car crop, steven landsburg argues that importing cars from japan and exporting wheat from iowa is analogous to…
A) importing wheat.
B) exporting cars.
C) growing cars in Iowa.
D) growing wheat in Japan.
Option (c), Steven Landsburg makes the case in the Iowa car crop that selling wheat from Iowa and importing cars from Japan are comparable to cultivating cars in Iowa.
How does comparative advantage play a role in world trade?The comparative advantage concept states that nations would engage in international trade while exporting the goods in which they are superior. No nation or person can possess a comparative advantage in every good.
When producing a particular good, agents in an economic model will be at a comparative advantage over their competitors if they can do so at a lower relative opportunity cost than those competitors. When referring to international trade, the term "comparative advantage" describes the items that one nation can produce more quickly or affordably than another. This will give someone else the option to create some things at a lower opportunity cost or on behalf of a different country.
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Do all US citizens file taxes?
Yes, all US citizens file taxes or resident alien, must file a federal income tax return for any tax year.
The federal income tax in the United States are imposed by the federal government and most states. The income taxes are determined by applying a tax rate, which may increase as income increases, to taxable income which is the total income less allowable deductions.
The purpose is to build and repair the country's infrastructure to improving education and public transportation and providing disaster relief.
The federal income tax return for any tax year in which your gross income is equal to or greater than the standard deduction.
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amazonians shone bright during another record-breaking turkey 5. once again,, customers around the world turned to amazon to deliver holiday cheer. what was one of the best-selling items?
Best-selling electronic products on Amazon in 2022:
Photography and cameras.The term "video game" is often used.Books, especially e-books distributed through the Kindle shop, are perennial best-sellers.Clothes, footwear, and accessories.Handmade.Pet Stuff.Domestic & Cooking.In light of the disappointing performance of its first physical store since its introduction in 2015 (which accounted for only 3% of total sales in the most recent quarter), the e-commerce behemoth has announced that it will shift its attention to grocery delivery.
Part of the selling pressure is coming from a less-than-optimistic outlook for the fourth quarter, with growth throughout the holiday season predicted to be only 2%-8%. Amazon Web Services was also behind expectations last quarter.
Amazon's stock dropped by an additional 13% during Thursday's extended trading, bringing its total loss for the year to over 42% after an earlier 4% decrease during regular trading. The steep drop was due to an earnings miss, with the e-commerce behemoth reporting EPS of $0.28 on revenues of $127.1bn; the latter number was up 15% YoY, marking a return to double-digit sales growth, but still failed.
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advertising effectiveness refers to: select one: a. the number of times a member of a target group is exposed to a specific advertisement. b. the extent to which advertising has produced the desired result. c. the impact an advertisement makes on potential customers. d. if it achieved the lowest cpm-tm. e. the number of target customers that come into contact with a given advertising message.
Advertising effectiveness refers to the extent to which advertising has produced the desired result. Thus, the correct answer is option B.
What is advertising?
Advertising refers to the methods used to draw attention to a good or service. In order to attract consumers' attention, advertising seeks to highlight a good or service. It is often used to market a particular product or service.
Effective advertising tells potential clients about our goods or services and reaches them. Advertising should ideally grab potential customers' attention and persuade them to use your product.
Therefore, the extent to which advertising has produced the desired result is referred to as its effectiveness.
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Men tend to define themselves on the quality of their ________, women tend to define themselves on the quality of their ________.
Men frequently base their identification on the excellence of their effort.
Women frequently base her personality on the excellence of their relationships.
What does excellence mean to you?
Excellence is the pinnacle of grandeur. Excellence is never simple to achieve. Because it is so unusual, individuals actually value excellence as a trait. To be the very perfect in a field is what it means to be exceptional.
What qualities make someone excel?
It implies that you make an effort to perform your best and to become the finest version of yourself. Perfection pursues what would be admirable, worthwhile, but morally righteous in order to portray moral goodness.
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what is the rational behind the ceiling when applying the lower of cost or market method to inventory?
A value of a good can shift over time. This holds significance, because if the price at which the inventory can be sold falls below the net realizable value of the item, thus triggering a loss for the company, then the lower of cost or market method can be employed to record the loss.
when investors value a company's inventory, those assets shall be recorded on the balance sheet at either the market value or the historical cost.
Historical cost refers to the cost of inventory at the time it was originally purchased.
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The city of Seattle limits each household to one can of free garbage collection per week. There are fees for any extra garbage collected from the curb. This type of quota policy is (Click to select) efficient way of reducing waste than charging a set price per can because:_________
a) the total cost of having garbage collected is the same for everyone with a quota the marginal benefit of having a can of garbage collected varies among households.
b) the marginal cost of a can of garbage is constant with a set can price.
c) everyone will have the same number of cans collected with a quota
The city of Seattle limits each household to one can of free garbage collection per week. There are fees for any extra garbage collected from the curb. This type of quota policy is (Click to select) efficient way of reducing waste than charging a set price per can because the marginal benefit of having a can of garbage collected varies among households.
The phrase "cash inflow" is used to describe the money that enters a company. It could come from borrowing, investments, or sales. Since a cash influx entails money entering a business, it is the reverse of a cash outflow. Focus is placed on a company's operating cash flows, which include cash inflows and outflows connected to its core business operations like the sale and purchase of inventory .
The cash flow statement details cash inflows and outflows whereas the income statement details revenue and expenses. A cash flow statement shows liquidity whereas an income statement shows profitability. Cash inflows are a component of numerous sources of revenue. Normally, revenue is generated through the sale of cattle and crops.
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Employers who provide health insurance to their employees must ensure that the employees’ health information is not disclosed to unauthorized parties.
A. True
B. False
Employers who facilitate health insurance to their employees must be sure that the employee's health information is not disclosed to unauthorized parties is a true statement.
This assertion is accurate. Employee personal information, such as health insurance, should not be disclosed by an employer. Employers who offer health insurance to their employees must make sure that the employee's health information is not shared with outside parties for reasons like marketing in accordance with HIPAA regulations.
An agreement involving a firm and a customer is health insurance. In exchange for a monthly premium payment, the corporation consents to cover all or a portion of the insured person's medical expenses.
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to provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as
Accountants adhere to norms, or standards, known as generally accepted accounting principles in order to deliver accurate, dependable, and unbiased information to decision-makers.
A person who practises accounting or accountancy is called an accountant. Accountants may use titles like "Chartered Accountant," "Chartered Certified Accountant," "Certified Public Accountant," or "Registered Public Accountant" after passing certification exams offered by respective professional associations. These professionals may be held accountable for professional misconduct and are given specific duties by statute, such as the authority to certify an organization's financial statements. Non-qualified accountants have no legal privileges or obligations and are free to operate independently or in the employ of a competent accountant. Cahan & Sun (2015) employed archival research to discover that the personal traits of accountants may have a major influence on the audit process and additionally affect audit fees and audit quality. A stereotype about practitioners has permeated popular culture.
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rachel is graduating from culinary school soon and she often imagines opening her own comfort food restaurant. her other passion is skiing in colorado, where she wants to continue vacationing several times a year. as her small business advisor, you believe it necessary to provide her with information that will help her make good business decisions. what would be helpful for rachel to know?
Restaurants are relatively easy businesses to start but are labor intensive and also have greatest failure rate is helpful for Rachel to know.
What is a restaurant?A restaurant is location of business where food and drinks are prepared and served to the clients. Meals are frequently served and enjoyed on premises, despite fact that many restaurants now provide takeout and food delivery services. Restaurants come in a wide range of designs and kinds, from inexpensive fast food and cafeterias to pricey luxury establishments. Additionally, they provide a wide variety of cuisines and service styles. The thermopolium, a marketplace for ready-to-eat food and beverages in ancient Greece and Rome, is recognized as the forerunner of the modern restaurant. In several aspects, these establishments resembled contemporary fast food restaurants. The majority of their users were those without personal kitchens. They had a lot of support from those living in the Roman Empire's insulae.
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Answer: Restaurants are relatively easy businesses to start but are labor intensive and also have greatest failure rate
the sale of available-for-sale debt securities should be accounted for on the statement of cash flows as a(n)
Available-for-sale (AFS) debt securities may be recorded on the balance sheet as current assets if they are expected to be sold within a year or as long-term assets if they are expected to be kept for more than a year.
AFSs are debt or equity securities that are bought with the intention of selling them before they mature.
These securities that are offered for sale are reported at fair value.
Accumulated other comprehensive income, which is shown in the equity column of the balance sheet, includes unrealized gains and losses.
Securities that have been bought and invested in must be categorized as being held till maturity, held for trading, or available for sale.
Contrary to trading investments, an AFS security's gains and losses appear in the other comprehensive income (OCI) classification up until the security is sold rather than in net income. The income statement shows net income. Therefore, the income statement does not include unrealized gains and losses on AFS securities.
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is buying shares in a mutual fund that seeks rapid price appreciation by purchasing stocks whose prices are expected to increase dramatically in a short period of time. what type of mutual fund is he purchasing?
Conrad Maestro is buying shares in a mutual fund that seeks rapid price appreciation. He is purchasing aggressive growth fund.
An aggressive growth fund is a mutual fund that invests in the equities of burgeoning companies in the hopes of making substantial gains. These funds' investments consist of businesses with strong potential for growth but higher risk.
As a result, aggressive growth funds aim to deliver returns that are higher than the industry average; yet, their underlying investments are frequently unstable, leading to substantial share price volatility.
Market research shows that aggressive growth funds provide above-average returns for investors willing to take on a little bit more risk. By making more significant investments in businesses they view as having strong growth prospects, they are anticipated to beat traditional growth funds.
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Correct question:
Conrad Maestro is buying shares in a mutual fund that seeks rapid price appreciation by purchasing stocks whose price is expected to increase dramatically in a short period of time. What type of mutual fund is he purchasing?
a communication plan defines the how, what, when, and who regarding the flow of project information to stakeholders and is key for managing expectations. group of answer choices true false
It is true that a communication strategy is essential for managing expectations since it specifies the how, what, when, and who regarding the flow of project information to stakeholders.
A project is any endeavour that is deliberately planned to accomplish a certain goal, whether it is carried out alone or in collaboration with others and may involve research or design. An alternate perspective describes a project as a series of connected tasks that must be completed within specific time, budget, and other constraints. A project could be a temporary social structure with teams working under time limits to complete certain tasks. A project may be used as an ad hoc system or as part of a larger programme management framework. Be aware that open-source software "projects" and artists' musical "projects" may not have a defined team, exact planning, or a time restriction
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Vertical analysis of financial statements is accomplished by preparing common-size statements.a. Trueb. False
It is true that vertical analysis of the financial statements is accomplished by preparing the common-size statements.
What are financial statements?Financial statements serve as official records of a person's, a company's, or another entity's finances and activities. Large companies may have intricate financial statements that include several management discussion and analysis notes in addition to the lengthy footnotes that accompany the financial statements. It is common practise to provide further explanations for each line item on the balance sheet, income statement, and cash flow statement in the notes. Financial statements for the individual are sometimes required when applying for a personal loan or financial help. A personal financial statement often includes information about a person's personal assets, liabilities (debts), sources of income, and expenses, or both. The organisation giving out the loan or aid chooses which form needs to be filled out.
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felix and oscar are roommates. oscar is messy and felix plans to move out unless they can come to an agreement. the roommates can only reach a private solution if oscar compensates felix for being messy.
a) true
b) false
felix and oscar are roommates. oscar is messy and felix plans to move out unless they can come to an agreement. the roommates can only reach a private solution if oscar compensates felix for being messy.
The given statement is FALSE
How Do Private Solutions Work?
Moral principles, charitable organizations, business mergers, and contracts based on the self-interest of relevant parties are examples of private responses to externalities.
According to the Coase theorem, when transaction costs are low, two parties can negotiate and come to an efficient decision even when there is an externality.
In reality, private parties frequently fall short of solving the externalities issue on their own.
Theoretically, parties who are impacted by an externality will negotiate to arrive at a solution that is more effective.
To achieve a more effective result, parties must have low transaction costs.
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all of the following are inputs to the aggregate production planning process except group of answer choices capacity constraints. demand forecasts. sales plans. financial constraints.
Sales plans are inputs to the aggregate production planning process except group of answer choices capacity constraints.
Sales are actions that involve the sale of products or the quantity of things sold over a predetermined period of time. A sale also includes rendering a service in exchange for payment. The vendor must complete the sale of the goods or services in response to an acquisition, appropriation, request, or direct interaction with the client at the point of sale. Ownership of the item is transferred, and a price is settled in exchange for that price, at which point ownership is transferred. The seller frequently completes the transaction rather than the buyer, and it could be done before the loan is due. In the event of a back-and-forth exchange.
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standard costs are preset costs for delivering a product or service under normal conditions. group startstrue or falsetrue, unselectedfalse, unselected
The discrepancy between real and anticipated sales or expenses brought on by the variance between the actual and planned prices per unit
What are the average and real costs?Actual cost is the amount actually paid to make the product as opposed to standard cost, which is an approximation of the expected cost. The complete cost of the supplies, direct labour, and production-related overhead expenses are included in the actual cost.
What is covered by the actual price?What Does a Real Cost Mean? Actual cost is the sum of the supplier-invoiced charge and the costs associated with delivering, configuring, and testing the asset. When an asset is first documented in the financial statements, its cost is shown as
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you own a bond that pays semiannual interest payments of $38. the bond is callable in 2 years at a premium of $76. what is the callable bond price if the yield to call is 7.9%?
the callable bond price if the yield to call is 7.9% will be: $1,059.64
N - 4.00
I/Y - 3.95%
PV -
PMT - $38.00
FV - $1,076
A callable bond is a debt security that can be reclaimed early by the issuer before its maturity at the issuer's discretion.
A callable bond allows companies to pay off their debt early and benefit from favorable financing cost drops.
A callable bond helps the issuer, and so financial backers of these bonds are compensated with a more attractive loan cost than on otherwise similar non-callable bonds.
A callable — redeemable — bond is typically called at a value that is somewhat above the par value of the debt. The earlier in a bond's life expectancy that it is called, the higher its call value will be. For example, a bond maturing in 2030 can be called in 2020. It may show a callable cost of 102. This cost means the financial backer gets $1,020 for each $1,000 in face value of their venture. The bond may also stipulate that the early call cost goes down to 101 after a year.
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Given your answer to question 13.04, what can you say about the social cost of production at that point, compared to the consumer’s marginal benefit? the social cost of production is ______________ than the consumer’s marginal benefit.a. Higherb. Lowerc. Equal tod. Can't tell
The social cost of production at that point, compared to the consumer’s marginal benefit. the social cost of production is higher than the consumer’s marginal benefit.
Neoclassical economics defines social cost as the total of the private expenses associated with a transaction plus the costs that consumers bear as a result of being exposed to the transaction but not paid or charged for. In other words, it represents the total of internal and external expenses. The private cost of production and the external cost of production that is imposed on others make up the social cost of production (pollution for example).
Social costs are the overall effects of economic activity on society's welfare; they are the sum of all externalities and associated private costs. societal costs associated with the building that are not accounted for in construction bids.
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Organizational culture is not statistically related to any measures of organizational effectiveness.a. Trueb. False
Organizational culture is not statistically related to any measures of organizational effectiveness. The statement is false.
Any statistical measure of organizational effectiveness has a relationship with organizational culture. An organization may increase its performance by offering a better working environment and greater internal communication thanks to a strong organizational culture.
The statistical link between organizational culture and effectiveness has been demonstrated in several research. Organizational culture, in reality, determines how employees interact with one another inside the company, which has an effect on organizational success.
A better organizational culture makes it easier to get the greatest performance out of each person, which increases the effectiveness of the company.
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which term describes discrimination that manifests itself in ways that are not visible or readily identifiable, yet is serious because it can impact interpersonal interactions between employees, employees and customers, and other important workplace relationships?
Covert term describes discrimination that manifests itself in ways that are not visible or readily identifiable, yet is serious because it can impact interpersonal interactions between employees, employees and customers, and other important workplace relationships.
Making unwarranted disparities between individuals based on the groups, classes, or other categories to which they allegedly belong or are thought to allegedly belong is known as discrimination. Race, gender, age, religion, handicap, sexual orientation, and other characteristics are only a few of the reasons why people may be subjected to discrimination.
When someone or a group is treated unfairly or worse than others based on their real or perceived membership in one or more groups or social categories, that is when discrimination happens most often. It entails denying members of one group access to opportunities or privileges that belong to another group.
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what environmental parameters would need to be monitored as ddt moves up the food web of an ecosystem?
The food web of an ecosystem is bioaccumulating in organisms as well as reducing population sizes that can feed higher trophic levels.
When animals consume feed containing DDT residues DDT accumulates in animal tissues through a process called bioaccumulation. The higher up the food chain an animal is, the higher the concentration of DDT in its body as a result of a process called biomagnification.
DDT enters the food web at the lowest levels when small organisms such as insects eat plant parts infected with this toxic substance. Insects can die or survive but are eventually eaten by larger creatures like birds, accumulating more and more DDT with each meal.
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true or false: a firm that has increasing returns to scale cannot have diminishing marginal product to both inputs. if true, explain why. if false, provide an example and show that it exhibits both increasing returns to scale and diminishing marginal products.
A firm that has increasing returns to scale cannot have a diminishing marginal product to both inputs. The above statement is false.
Diminishing Marginal Returns :
The law of decreasing marginal returns states that with each further unit in one issue of production, whereas all alternative factors square measure command constant, the progressive output per unit can decrease at some purpose. The law of decreasing marginal returns doesn't essentially mean that increasing one issue can decrease overall total production, which might be negative returns, however, this outcome sometimes happens.
Reducing the impact of the law of decreasing marginal returns could need to discovering the underlying causes of production decreases. Businesses ought to rigorously examine the assembly offer chain for instances of redundancy or production activities intrusive with one another.
By reversing the law of decreasing returns, if production units square measure off from one issue, the impact on production is tokenish for the primary few units and should end in substantial value savings. for instance, if an eating house removes many cooks instead of hiring a lot, it's going to understand value savings while not experiencing considerably diminished production.
Example of decreasing Marginal Returns, For example, an eating house hiring a lot of cooks whereas keeping a similar room area will increase total output to a degree, however, each further cook takes up area, eventually resulting in a smaller will increase in output as their square measure too several cooks within the room. the whole output will decrease at some purpose, leading to negative returns if too several cooks get in every other's manner and eventually become unproductive.
Reducing the impact of decreasing marginal returns needs to discover the underlying causes of production decreases.
Returns to Scale:
On the opposite hand returns to scale refers to the proportion between the rise in total input and also the ensuing increase in output. There square measure 3 forms of returns to scale: constant returns to scale (CRS), increasing returns to scale (IRS), and decreasing returns to scale (DRS).
A constant comeback to scale is once a rise in input leads to a proportional increase in output. Increasing returns to scale is once the output will increase during a larger proportion than the rise in input. Decreasing returns to scale is once all production variables square measure magnified by an explicit proportion leading to a less-than-proportional increase in output.
For example, if a soap manufacturer doubles its total input but gets solely a four-hundredth increase in total output, it will be aforementioned to possess full-fledged decreasing returns to scale. If a similar manufacturer finally ends up doubling its total output, it's achieved constant returns to scale. If the output is magnified by one hundred twenty, the manufacturer full-fledged increasing returns to scale.
therefore, in a nutshell, we can conclude that the given system, (a firm that has increasing returns to scale cannot have a diminishing marginal product to both inputs) is expounded.
The definition of a 'firm' inside the subject of economics is any agency that seeks to make earnings through manufacturing or promoting products or services – or both – to consumers. as an instance, one of the most commonplace makes use of this term is for 'regulation corporations,' which commonly promote offerings in relation to the regulation.
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