2) Explain why a profit maximizing firm produces the output that equates marginal revenues to marginal costs (MR=MC). In a perfectly competitive market‚ producers are price-takers and consumers are price-takers. There are many producers‚ none having a large market share and the industry produces a standardized product‚ also free entry and exit of the industry. They produce using the optimal output rule: produce where marginal revenue equals marginal cost as Smith (1904) demonstrated. Figure
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Theories of Profit There are various theories of profit‚ given by several economists‚ which are as follows: 1. Walker’s Theory of Profit as Rent of Ability This theory is pounded by F.A. Walker. According to Walker‚ “Profit is the rent of exceptional abilities that an entrepreneur may possess over others”. Rent is the difference between the yields of the least and the most efficient entrepreneurs. In formulating this theory‚ Walker assumed a state of perfect completion in which all firms are
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Some of the ways that the Private Securities Reform Act of 1995 changed both the responsibilities and at the same time benefited auditors The Reform Act: Places a cap on damages that would potentially reduce the maximum amount that auditor’s could be liable for. Requires plaintiffs to pay defendant’s reasonable attorney’s fees and expenses directly related to litigation found by the court to be frivolous and unwarranted. This may make it unlikely that auditor’s will be sued for deep pockets
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Session 2 : Principles of Accounting and Financial Reporting - Chapter Two Quiz 1. Which of the following is a difference between financial reporting for internal service and enterprise funds? (Points : 10) Internal service funds are reported in the governmental fund financial statements. Internal service funds are reported in the proprietary fund financial statements. Internal service funds are generally
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Immigration Since 2001‚ when September 11th happened‚ many people in the United States have developed a fear of allowing immigrants into the U.S. It went to levels of border control and more. Therefore some judge that immigration is a threat to the U.S. They should not consider that because everything that occurs is not due to immigrants. The government can stop illegal immigration right now but would it not affect the U.S. more to do so? Restrictionists claim that large-scale immigration-legal
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SPM ESSAY - NARRATIVE ESSAY (Ending) 2011 : Write a story that ends with: "...They looked at each other and smiled meaningfully." ( This is an actual SPM question for the year 2011 - If you are asked to end with certain phrase / sentence then do end your Ending with the given phrase / sentence.) * In the question above‚ the key word which you need to understand is’MEANINGFULLY’ which means ’full of meaning / purpose / value etc’. Therefore‚ before you write your essay‚ make sure your draft
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1.3 Micro & Macro Economics for Business Decisions Syllabus of the chapter: (B) Macro Economics (1)Fiscal Policy: Basic Economics Indices (National Income‚ National Production‚ National Employment‚ General prices level). Aggregate Demand (Consumptions‚ Government Expenditure & Business investment). Aggregate Supply. Determination of Income (or production). Taxation & Fiscal policy. A Note for MFA (I semester) Students:-The words underlined above are the portions completed till date in the
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2012 The World Ending As We Know It As ridiculous as predictions of the world ending are‚ there are some pretty accurate predictions. According to climatologist‚ the Earth is actually in an Ice Age cycle that changes between warm and cold periods. Right now we are in an interglacial period‚ the warm time in between the much longer and colder ones. If the record of ice ages is accurate and consistent‚ then it’s due to get much colder in the next few thousand years – maybe starting
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Alternate ending to “The Landlady” ‘’Why have only two boys been here for a long duration of time’’? Asked young Billy. “Trust me‚ there have been many‚ many people here over the years”. Exclaimed the women. “Why have only two signed in then”? “Please dear‚ won’t you come over here to have a cup of tea with me” Shuttered the old women. “Why If you insist‚ may we talk about this later though‚ I am quite curious”. Said Billy Right around that time‚ Billy heard the most peculiar noise he had ever
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[Economy] Fiscal Consolidation‚ Fiscal Deficit : Meaning‚ Implications‚ Explained Why Vijay Kelkar Committee was formed? 1. Parts of Budget= Revenue + Expenditure 2. Types of Budget= Deficit/Surplus/Balanced 3. Why printing more money=Bad idea? 4. When fiscal deficit NOT BAD? 5. When & Why is fiscal deficit BAD? 1. Creates inflation 2. Black Money 3. Bond Yield increased 4. Crowding out investment 5. Twin deficit hypothesis 6. Current
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