If a consumer must spend her entire income on some combination of two commodities and chooses to spend it all on just one of the​ commodities, then A. the other commodity is an economic bad. B. the other commodity must have zero marginal utility. C. the other commodity generates less utility per dollar spent on the good. D. the two commodities must be perfect substitutes.


Answer 1

The correct answer is  (C)

Explanation: Utility is the satisfaction derived out of a product. Combinations of two goods within the consumer's income or budget line can only be used which are attainable. It depends on individual to choose any combination out of several. Here in this case consumer is spending only on  one commodity that means other good is comparatively low which means utility generated out of  other good is less.

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Shamrock Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 161,900
Purchases (gross) 697,000
Freight-in 31,400
Sales revenue 924,000
Sales returns 73,200
Purchase discounts 12,100

Compute the estimated inventory at May 31, assuming that the gross profit is 40% of net sales



The estimated inventory at May 31 is $240,100


The gross profit is the difference between the sales revenue and the cost of good sold.

The gross profit percentage is the ratio of gross profit to net sales expressed as a percentage.

Net sales is the sales less returns and allowances. Similar to net sales is net purchases which is the gross purchase net the allowances and returns.

Net purchases = $697,000 - $12,100

= $684,900

Net sales = $924,000 - $73,200

= $850,800

Gross profit margin percent = gross profit/net sales

gross profit = 0.4 * $850,800

= $212,700

cost of goods sold = $850,800  - $212,700

= $638,100

The movement in the balance of inventory at the start and end of a period is as a result of sales and purchases. While sales reduces the balance in inventory, purchases increases the balance. This may be expressed mathematically as

Opening balance + purchases + freight inward - cost of goods sold = closing balance

$161,900 + $684,900  + $31,400 - $638,100  = Estimated ending inventory

Estimated ending inventory = $240,100

Which statement bestexplains the association between a risk factor and the development of adisease?a. Anyone with a risk factor will develop the disease.
b. The absence of a risk factor guarantees freedom from the disease.
c. The fewer risk factors for a disease, the better the chances for good health.
d. Interventions must be targeted to each individual risk factor.
e. Risk factors tend to be short-lived, so their presence does not predict long-term risk ofdisease.



C. The fewer the Risk Factors for a Disease the better the Chances of a Good Health


Understanding Risk factors in health is very important especially when trying to find ways to ensure good health. Risk factors are important in many important health decisions. For instance, it is important to know family and personal risks, risks and benefits of a treatement and even the risk factors for a disease. All these assist in making better decisions both by the individual and the medical practitoner

A disease's risk factor represent those situations, living conditions, habits, choices etc that can heighten the probability of getting  a certain disease. A disease's risk factor represents those things or factors that tend to increase the chances of contracting such a disease, while it doesn't necessarily mean they will definitely occur, the higher these factors, then the higher the possiblity of contracting it and the lower the risk factors then the lower the possibility of contracting the disease.

For instance, it is known that smoking cigarette is a risk factor especially for lung cancer, however, family history, exposure to second hand smoke as well as radon gas are also factors that can contribute to lung cancer. These repesent the risk factors.

Risk factors are divided into five:

  • Physiological
  • Behavioural
  • Demographic
  • Environmental
  • Genetic.

Maintenance money for an athletic complex has been sought. Mr. Kendall, the Athletic Director, would like to solicit a donation to cover all future expected maintenance costs for the building. These maintenance costs are expected to be $1 million each year for the first five years, $1.3 million each year for years 6 through 10, and $1.5 million each year after that. (The building has an indefinite service life.)If the money is placed in the account that will pay 5% interest compounded annually, how large should the gift be?



Total donation= $76,000,000


Giving the following information:

These maintenance costs are expected to be $1 million each year for the first five years, $1.3 million each year for years 6 through 10, and $1.5 million each year after that. The money is placed in the account that will pay a 5% interest compounded annually.

First, we need to calculate the final value of the donation:

We have 3 perpetual annuities.

FV= 1,000,000/0.05= 20,000,000

FV= 1,300,000/0.05=26,000,000

FV= 1,5000,000/0.05= 30,000,000

Total donation= $76,000,000

Final answer:

The amount of donation Mr. Kendall should solicit to cover all future expected maintenance costs for the athletic complex is approximately $58.81 million, based on the principle of Time Value of Money.


This problem is related to the concept of the Time Value of Money, which is a fundamental principle in finance. According to this principle, the value of money you have now is greater than the same amount in the future due to its potential earning capacity. It can be solved using the formula for the present value of a perpetuity.

In the first five years, Mr. Kendall needs $1 million per year, thus, the present value (PV) of these costs could be calculated by $1 million / 0.05 = $20 million. For years 6 through 10, he needs $1.3 million per year, however, since these costs will occur in the future, they should be discounted back to the present. Hence, the PV would be $1.3 million / 0.05 = $26 million, then discounted back for five years, which is $26 million / (1.05)^5 = $20.43 million. For any year after the 10th year, he needs $1.5 million per year, this is a perpetuity that will start in year 11, so, its PV would be $1.5 million / 0.05 = $30 million, then discounted back for ten years, which is $30 million / (1.05)^10 = $18.38 million. Finally, to cover all the expected maintenance costs, the donation should be the sum of these PVs, which is $20 million + $20.43 million + $18.38 million = $58.81 million.

Learn more about Time Value of Money here:



Suppose that Tucker Industries has annual sales of $6.60 million, cost of goods sold of $2.94 million, average inventories of $1,205,000, and average accounts receivable of $660,000. Assuming that all of Tucker's sales are on credit, what will be the firm's operating cycle? (Round your answer to 2 decimal places.)



186.10 days


The operating cycle = Days inventory outstanding + days sale outstanding


Day inventory outstanding = (Beginning inventory + ending inventory) ÷ cost of goods sold × number of days in a year

= ($1,205,000) ÷ $(2,940,000) × 365 days  

= 149.60 days

Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) ÷ Net sales × number of days in a year

= ($660,000) ÷ ($6,600,000) × 365 days

= 36.5 days

Now put these days to the above formula  

So, the days would equal to

= 149,60 days + 36.5 days

= 186.10 days

Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget. a. Beginning cash balance on June 1, $26,000.
b. Cash receipts from sales, $264,000.
c. Budgeted cash disbursements for purchases, $138,000.
d. Budgeted cash disbursements for salaries, $80,000.
e. Other budgeted expenses, $15,000.
f. Cash repayment of bank loan, $10,000.
g. Budgeted depreciation expense, $25,000.





The cash budget is a forecast of the company's expected movement in cash considering the expected outflows and inflows. This movements result in a change between the opening and ending cash balance. This may be expressed mathematically as

Opening balance + Cash receipts - Cash disbursed = ending balance

Cash receipts for the period

= $264,000

Cash disbursed

= $138,000 + $80,000 + $10,000 + $15,000

= $243,000

ending balance  = $26,000 + $264,000 - $243,000

= $47,000

Edward Lewis just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Sunland Corp. that pays an annual coupon rate of 4.5 percent. If the current market rate is 10.00 percent, what is the maximum amount Edward should be willing to pay for this bond





PMT = 45%

Fv =  -1000

N = 5

Rate = 10%

Using the Excel funtion

Bond Price = PV(45, -1000, 5, 10)

Bond Price = $791.51

Hence, the maximum amount Edward should be willing to pay for this bond is $791.51