In 2017, Skylar sold an apartment building for $20,000 cash and a $300,000 note due in two years. Skylar’s cost of the property was $250,000, and he had deducted depreciation of $150,000, $60,000 of which was in excess of what the straight-line amount would have been.Do not round intermediate computations. Round your final answers to the nearest dollar.Under the installment sales method, Skylar's total realized gain is $220,000. In 2017, he recognizes § 1250 gain of $10,000 and § 1231 gain of $10,000.
Property is any object that a person or a commercial enterprise has felony identify over. assets can be tangible items, along with homes, automobiles, or appliances, or it may seek advice from intangible items that convey the promise of future worth, inclusive of inventory and bond certificates.
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Cashmere Soap Corporation had the following items listed in its trial balance at 12/31/2021:
Currency and coins $ 590 Balance in checking account 2,500 Customer checks waiting to be deposited 1,400 Treasury bills, purchased on 11/1/2021,
mature on 4/30/2022 2,800 Marketable equity securities 9,900 Commercial paper, purchased on 11/1/2021,
mature on 1/30/2022 6,000 What amount will Cashmere Soap include in its year-end balance sheet as cash and cash equivalents?
A. 13,290
B. 7,290
C. 10,490
D. 23,190
Based on accounting principles, the content of the question, the amount Cashmere Soap will include in its year-end balance sheet as cash and cash equivalents is $10,490
What is a Year-End Balance Sheet?A year-end balance sheet is a term that is used to describe the summary of financial activities of a company that will show what assets the business owns and the liabilities that finance the assets.
Generally, the year-end balance sheet is often referred to as the business's statement of financial position which outlines the current assets and liabilities of the business.
In this case, to find the amount Cashmere Soap will include in its year-end balance sheet as cash and cash equivalents we have the following:
Particulars Amount ($)
Currency and coins 590
Add: Balance in checking account 2,500
Add: Customer checks waiting to be deposited $1,400
Add: Commercial paper, purchased on 11/1/2021, mature on 1/30/2022 $6,000
=> $590 + $2500 + $1,400 + $6,000 = $10,490
Hence, in this case, it is concluded that the correct answer is Cash and cash equipment =$10,490
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In the bond market, the bond demanders are the ________ and the bond suppliers are the
In the bond market, the bond demanders are the lenders and the bond suppliers are the borrowers.
In the bond market, the bond demanders are the lenders and the bond suppliers are the. In the bond market, the bond demanders are the lenders and the bond suppliers are the borrowers.
The bond market is a financial marketplace in which participants can trouble new debt, called the number one marketplace, or purchase and sell debt securities, called the secondary market.that is normally within the form of bonds, but it can include notes, bills, and so forth for public and personal expenses.
The bond market refers broadly to the shopping for and promoting of diverse debt devices issued by means of a variety of entities. organizations and governments trouble bonds to raise debt capital to fund operations or are seeking increase opportunities. In go back, they promise to repay the original investment quantity, plus hobby.
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mary graham has worked as a real estate agent for piedmont properties for 15 years. her annual income is approximately $100,000 per year. mary is considering establishing her own real estate agency. she expects to generate revenues during the first year of $2 million. salaries paid to her employees are expected to total $1.50 million. operating expenses (e.g., rent, supplies, utility services) are expected to total $250,000. to begin the business, mary must borrow $300,000 from her bank at an interest rate of 15%. equipment will cost mary $50,000. at the end of one year, the value of this equipment will be $30,000, even though the depreciation expense for tax purposes is only $5,000 during the first year.
The pre-tax accounting profit is $170,000. The pre-tax economic profit is $55,000 and the actual depreciation is $20,000.
What does the accounting term depreciation mean?A non-cash business expense called depreciation is assessed throughout the time that an asset is valuable to your company. By removing the cost of using up a portion of an asset's worth from taxable revenue, every organization can benefit from depreciation.
Which assets are subject to depreciation?Machines, automobiles, office buildings, buildings you rent out for revenue (both residential and commercial property), and other equipment, such as computers and other technologies, are all examples of depreciable property.
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a machine with a cost of $146,000, accumulated depreciation of $93,000, and current year depreciation expense of $21,000 is sold for $46,400 cash. the amount that should be reported as a source of cash under cash flows from investing activities is:
The amount that should be reported as a source of cash under cash flows from investing activities is $46,400. It can be calculated from the sold cash.
Cash can be meant as a value or price that is paid directly. Sometimes it also contain the number of assets that can be easily converted into cash immediately, as reported by a corporation. From the scenario we were informed that a cost of machine is $146,000, current year depreciation expense of $21,000 that is sold for $46,400 cash.
Cash by sale of Equipment is = sold cash = $46,400
Hence, we can say that the value that should be report as a source of the cash under cash flow by investing activities is $46,400.
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product owner wants advice from the scrum master about estimating work in scrum. what guidance should a scrum master give
The product owner wants advice from the scrum master about estimating work in the scrum. "Product Backlog items must be estimated in story points." is good advice from a scrum master
What is a scrum master?Generally, The scrum master is responsible for assisting the team in improving and standardizing the procedures that they use to accomplish their objectives.
They do it in the capacity of a team member or collaborator, rather than, ideally, as someone in charge of the situation.
The most effective scrum teams are self-organizing, and as a result, they do not respond well to supervision from on high.
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CQ not found
the company earned $1,600 of commissions revenue that is not yet recorded at month-end. record the required adjusting entry, if any.
For recording the required adjusting entry, if any we need to know that Every adjusting entry will have at least one income statement account and one stability sheet account. Cash will in no way be in an adjusting entry.
Which of the following events would no longer require an end-of-year adjusting entry?Providing offerings on account does now not require an end-of-year adjusting entry. Accounts receivable is accelerated when offerings are supplied on account and is diminished when charge is acquired from customers.
What happens if adjusting entries are no longer prepared?The reason of adjusting entries is to ensure that your financial statements will reflect accurate data. If adjusting entries are now not made, these statements, such as your stability sheet, income and loss statement, (income statement) and money drift announcement will no longer be accurate.
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https://brainly.com/question/13933471#SPJ4sarah has been asked to take a couple of minutes to summarize for her subordinates the new safety policies adopted by the board of directors. sarah's presentation is called a(n)
Sarah has been asked to take a couple of minutes to summarize for her subordinates , sarah's presentation is called a(n) briefing
A creative brief is a document that creative professionals and agencies use to produce creative results. Visual design, text, advertising, websites and more. Documents are typically created by the client and approved by creative her team of designers, writers, and project managers.
What is the most important part of the briefing?Please describe your goal. This is probably the most important part of the briefing, and it's important to think through your strategy and goals before starting your project. Why do we need this project? what are your wishes?
Benefits of team meetings :Timely face-to-face communication that prevents rumors and gossip from gaining credibility. Good Two-Way Communication - It's important not only to keep people informed, but also to listen and respond to their questions and concerns.
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what is the total salesmix variance in terms of the contribution margin? (round intermediary calculations to two decimal places.)
Total sales mix variance in terms of the contribution margin
Budgeted sales mix
Standard = 2700/ (2700+700) = 0.79
Super = 700/ (2700+700) = 0.21
Total sales quantity Variance
= (Actual Sales-Budgeted) * budgeted sales mix * budgeted contribution Margin
Standard = [(2800+1400) -(2700+700)] *0.79*500
= 316,000
Super = [(2800+1400) -(2700+700)] *0.21*1070
= 179,760
Total = 316,000+179,760
= 495,760 Favorable
The discrepancy between a company's budgeted sales mix and its actual sales mix is known as the sales mix variance. The percentage of each product sold in relation to overall sales is known as the sales mix. Because some items have better profit margins than others, the mix of sales has an impact on overall business profitability. Each of the company's product lines is included in the variance in sales mix.
The sales mix contrasts a product's sales with overall sales.
The sales mix variance determines the profitability of a product or product line by comparing forecasted sales to actual sales.
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1. the length of time for which a business summarizes its financial information and reports its financial performance. (p. 159)
the duration during which a business reports its financial results and summarizes its financial data. (P. 159), 2. Every period of time that includes.
What does a business consist of?A business is an organization or enterprising body that engages in commercial, commercial, and professional activities. Yes, companies can be either for-profit businesses or nonprofit organizations. Among the various business structures are partnerships, companies, limited liability companies, and sole proprietorships.
Which type of business is most prevalent?The four main business structures are sole proprietorships, partnerships, limited liability companies (LLC), and corporations. Before launching a company, founders should carefully consider the corporate structure that is best suited for their venture.
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______ represents the degree to which employees are accepted and treated fairly by their organization.
Includement is a measure of how well a company accepts & treats its personnel.
What are the definition and significance of organization?The act of organizing or being organized, pronounced "rg-n." the style or condition of being organized, as in the way he presented his subject in a speech. an organization that is very disciplined.
Which 3 sorts of organizations are there?Functional, departmental, and matrix organizations are the three types of organizations that better represent the organizational structures currently used by the majority of businesses. Owners must weigh the benefits and drawbacks of each of these formats before picking which to use for their particular firm.
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a company budgets production of 15,000 solar panels in july. each unit requires 4 hours of direct labor at a rate of $20 per hour. the cost of direct labor for july is:
If a company budgets production of 15,000 solar panels in july. each unit requires 4 hours of direct labor at a rate of $20 per hour. the cost of direct labor for july is: $1,200,000.
How to find the labor cost?Based on the information given we would be making use of this formula to determine the Cost of direct labor.
Cost of direct labor = Units Produced × Direct Labor hours per Unit × Direct Labor rate per Hour
Where:
Units Produced= 15,000
Direct Labor hours per Unit =4
Direct Labor rate per Hour = $20
Let plug in the formula
Cost of direct labor = 15,000 ×4×$20
Cost of direct labor = $ 1,200,000
Therefore we can conclude that the Cost of direct labor is $1,200,000.
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The teachers union has been negotiating with the school board on behalf of all the teachers for a 4% pay increase and two additional sick-days each year. The teachers union is in the process of ____. collective bargaining
The teachers union has been negotiating with the school board on behalf of all the teachers for a 4% pay increase and two additional sick days each year. The teachers union is in the process of collective bargaining
Collective bargaining refers back to the official process through which change unions negotiate with employers on behalf of their contributors in respect of employees' terms and situations of employment. An example of collective bargaining can be approximately a pay boom or an alternate in running hours.
The time period "collective bargaining" became first utilized in 1891 by Beatrice Webb, a founder of the sector of industrial members of the family in Britain. It refers to the type of collective negotiations and agreements that had existed for the reason of the rise of change unions at some point in the 18th century.
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for each item listed below, indicate the allocation terminolgy for the ite. use the following terms for your answer: amortization depreciation none of theser
An allocation is a quantity of something, specifically cash, that is given to a selected individual or used for a specific motive.
>Intangible belongings are AMORTISED
>natural sources are DEPLETED
>Tangible properties are DEPRECIATED.
requirements asked [incorrect ones]
>Trademark = Intangible assets = Amortisation.
>studies and improvement costs = None of these.
>gadget = Tangible asset = Depreciation
>Annual licensing prices = None of those.
>Land improvement = Depreciation [however, just ‘Land’ is not depreciated]
To allocate is to set aside a certain amount of money for a price. You normally listen to approximately the authorities allocating funds for education or the military, but you may in my view allocate some of your allowances to buying comedian books.
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erin has written a business plan that she will be sharing with other members of fbla across the country. she wants to make sure that she is listed as the author in the document. which feature should she use?
Erin has written a business plan that she will be sharing with other members of fbla across the country. she wants to make sure that she is listed as the author in the document. She should use Document Properties
How can I enlarge a single cell in a Word table independently of the other cells?
Click a cell in the desired column to resize it, then alter the width to a certain value. Click in the Table Column Width box under the Cell Size group on the Layout tab, then enter the desired values. Click on your table to automatically make the columns fit the contents.
Which of the subsequent methods is used to transfer data from one page to another?
The selected data is preserved in temporary storage in both circumstances; the copy command makes a duplicate of the selected data while the cut command removes it from its original spot (the clipboard). Anywhere a paste command is used, the copied material is added afterwards.
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A corporation issued 6,400 shares of $10 par value common stock in exchange for some land with a market value of $98,000. The entry to record this exchange is:
A. Debit Land $98,000; credit Common Stock $64,000; credit Paid-In Capital in Excess of Par Value, Common Stock $34,000.
B. Debit Land $98,000; credit Common Stock $98,000.
C. Debit Land $64,000; credit Common Stock $64,000.
D. Debit Common Stock $64,000; debit Paid-In Capital in Excess of Par Value, Common Stock $34,000; credit Land $98,000.
E. Debit Common Stock $98,000; credit Land $98,000.
Option A is correct. The entry to record this exchange is Debit Land $98,000; credit Common Stock $64,000; credit Paid-In Capital in Excess of Par Value, Common Stock $34,000.
The amount of received par value is credited to the common stock account. In this case, $100,000 in proceeds (100,000 shares issued at par value of $1 each) were received by the corporation. The excess funds collected over par value are also credited to the Additional Paid-In Capital account by the business.
A company's stock may have a par value or have no par value. Both of these categories are essentially historical oddities that have no bearing on the market price of the stock.
The stated price per share is known as the par value or face value. Before they were replaced by more modern electronic stock certificates, this price was printed on paper stock certificates. The company's certificates were issued as no-par value stocks if it did not set a par value.
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the previous statement for your credit card had a balance of $560. you make purchases of $150 and make a payment of $50. the credit card has an apr of 21%. what is the finance charge for this month?
If the previous statement for your credit card had a balance of $560. you make purchases of $150 and make a payment of $50. the credit card has an apr of 21%. The finance charge for this month is: $11.55.
How to find the finance charge?Using this formula to find the finance charge
Finance charge = APR / 12 x ( Previous balance - Payments + Purchases)
Where:
APR /12 = .21/12 = 0.0175
Previous balance = $560
Payment = $50
Purchases = $150
Let plug in the formula
Finance charge = 0.0175 x (560 - 50 + 150 )
Finance charge = 0.0175 x 660
Finance Charge = $11.55
Therefore the finance charge is $11.55.
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The Clothing Cove has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2024, its first year of operations:
January 2 Issues 100,000 shares of common stock for $24 per share.
February 6 Issues 1,900 shares of 7% preferred stock for $13 per share.
September 10 Purchases 12,000 shares of its own common stock for $29 per share.
December 15 Resells 6,000 shares of treasury stock at $34 per share.
In its first year of operations, The Clothing Cove has net income of $149,000 and pays dividends at the end of the year of $94,000 ($1 per share) on all common shares outstanding and $1,330 on all preferred shares outstanding
To track changes in stockholders' equity, a statement of stockholders' equity is prepared and the stockholders' equity final amount.
The corporation issues 100,000 shares of common stock with a $1 par value at a price of $18 per share on January 2. As a result, the additional paid-in capital grows by $1,700,000 [($18-1)*100,000] and the common stock increases by $100,000 (100,000$1).
On February 6, the business issues 1,300 shares of preferred stock at a par value of $10 for a price of $13. As a result, the preferred stock will rise by $13,000 (1,300 times $10) and the additional paid-in capital will rise by $3,900 [($13-10) × 1,300].
On September 10, the corporation buys 12,000 shares of treasury stock at a price of $23 per share, increasing its treasury stock by $276,000 (12,000*$23).
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mary operates a wedding preparation services that aids brides-to-be in the planning of their weddings. to maintain a quality image and a standardized service, mary provides extensive training for each of her employees. what unique aspect of services is mary trying to address?
mary operates wedding preparation services that aid brides-to-be in the planning of their weddings. to maintain a quality image and a standardized service, mary provides extensive training for each of her employees. Mary is trying to address the inconsistency.
inconsistencyinconsistency noun (DIFFERENCE) [C or U] the presence of certain ideas, assertions, arguments, etc. that do not agree with others, or something that has this feature, such as an idea, statement, or argument: What you've written contains a few discrepancies. The theory and practice are not entirely consistent.
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direct benefit by usig bim for cm planning include:?? choose all applicable improved communication all correct enforced consistency early detection of constructability issues
Contractors and designers can optimize their workflows before construction begins by using the resources provided by BIM software. Significant cost reductions and waste reduction may result from this.
Additionally, BIM designs enable far greater collaboration and communication between various project participants. It ensures that everyone is always working with the most recent model because it enables different experts to view BIM blueprints whenever they need to. By doing this, you can lessen mistakes and rework caused by using wrong or incomplete information. Contractors and designers can optimize their workflows before construction begins by using the resources provided by BIM software.
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in which of the following situations would a monte carlo simulation be used by a project manager? more than one answer may be selected.
A Monte Carlo simulation is a model used to predict the probability of a variety of outcomes when the potential for random variables is present. Monte Carlo simulations help to explain the impact of risk and uncertainty in prediction and forecasting models.
The Monte Carlo simulation is a mathematical approach that permits you to account for risks and assist you are making records-driven choices. It is based totally on historic data that is run via many random simulations to project the feasible final results of destiny initiatives underneath similar situations.
Conditions (along with first-rate, worst, or maximum in all likelihood cases) for each input variable are chosen and the consequences are recorded. by contrast, Monte Carlo simulations pattern from a possibility distribution for each variable to supply loads or heaps of feasible results.
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which strategy most helps your audience process the information listed on your slide presentation ?
A approach that will most effectively aid your audience in processing the information on your slide presentation is to minimize the quantity of information on any individual slide.
Presentation strategy: what is it?There are many more aspects to a plan. It's how you persuade your audience that your strategy is excellent so they'll support it. Consider the goal as the "why," and the techniques as the "what." The "how" is the approach.
What is the presentation's most crucial point?The start is the most important part of your presentation since it defines the overall tone. The audience's attention must be captured, usually in the first 15 seconds.
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internet and digital technologies have cut out which element of standard product channels? group of answer choices manufacturers wholesalers retailers consumers
Internet and digital technologies have cut out retailers element of standard product channels.
Retail refers to the practice of purchasers purchasing goods and selling them directly to consumers, as opposed to suppliers or wholesalers. They buy products from wholesalers and sell limited quantities of them to final clients.
A reputable illustration of a traditional retailer is Best Buy. It pays full price for products from producers like Sony and Whirlpool and then sells them to customers for more money. Most of the things that Best Buy sells aren't made by the company.
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a stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) stock.
A Growth stock is a share of stock issued by a company that, in comparison to other businesses in the economy, has the potential to generate earnings that are above average.
Growth investing is a stock-buying technique that tries to make money from companies that grow faster than their industry or the market as a whole. A financial ratio called dividend yield illustrates how much a corporation pays out in dividends annually in relation to the price of its stock.
Growth-oriented businesses typically have innovative leadership teams that are focused on substantial market potential. Growth stock investing is not a surefire technique to generate money on the stock market.
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which of the following statements about investments in bonds are true? note: select all that apply. check all that apply if the stated rate is higher than the market rate, investors will purchase the bond at a discount. if the stated rate is higher than the market rate, investors will purchase the bond at a discount. if the stated rate is higher than the market rate, investors will purchase the bond at a premium. if the stated rate is higher than the market rate, investors will purchase the bond at a premium. the investor values that stream of future cash flows based on the stated rate of the bond. the investor values that stream of future cash flows based on the stated rate of the bond. the purchase price of a bond security is determined by computing the present value of the related stream of cash flows.
The statements that are true about investments in bond are:
A. If the stated rate is higher than the market rate, investors will purchase the bond at a premium.D. The purchase price of a bond security is determined by computing the present value of the related stream of cash flows.What is a bond investment?As an investment, a bond means a fixed-income instrument that represents a loan made by an investor to a borrower such as corporate or governmental body. This instrument could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.
Bonds are mostly used by entities like companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of a bonds are debtholders, or creditors, of the issuer.
The detail of bond include the end date when the principal of the loan is due to be paid to the bond owner and usually include the terms for variable or fixed interest payments made by the borrower.
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delivery cycle time is an example of which performance measure category? multiple choice internal business processes. customer. financial. learning and growth.
An example of an internal company process is delivery cycle time. Thus, the right choice is internal business processes.
What are internal business processes?A business process, business technique, or business function is a set of connected, organized actions or tasks performed by people or equipment in a defined sequence that results in the provision of a service or product to a specific client or customers. An internal process is a sort of business process that is carried out by companies without the influence or participation of external business partners. Internal processes are a component of the balanced scorecard approach, which is a performance indicator that can be used by a company to identify areas for development.
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the impact of the government's decision to raise revenue by printing money on the value of money is known as the
The impact of the government's decision to raise revenue by printing money on the value of money is known as the inflation tax.
What is inflation?
⇒The term "inflation" describes an economy's overall rise in the cost of goods and services. Each unit of currency may purchase fewer products and services as the general price level rises, hence inflation is associated with a decline in the purchasing power of money. Deflation, a continuous drop in the general level of prices for goods and services, is the reverse of inflation. The annualized percentage change in a general price index, or inflation rate, is the most widely used indicator of inflation. The consumer price index (CPI) is frequently employed for this purpose because price increases are not uniform across the board. In the United States, wages are also calculated using the employment cost index.
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Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Sales (336,000 units) $4,377,000
Cost of goods sold 2,592,000
Gross profit 1,785,000
Operating expenses 840,000
Net income $945,000
The cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed.
In September, Moonbeam receives a special order for 21,600 toasters at $8.12 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs.
Prepare an incremental analysis for the special order.
Prepare an incremental analysis for the special order is 46,300. Something increasing incrementally is described as doing so over a short period of time.
Businesses utilize incremental analysis as a decision-making tool to compare the actual costs of several options. The incremental analysis method is also known as the applicable cost approach, marginal analysis, or differential analysis. Incremental analysis is a method for evaluating financial data that is also known as the relevant cost approach, marginal analysis, or differential analysis. Relevant cost, sunk cost, and opportunity cost are the three basic ideas that are pertinent to incremental analysis.
Revenues (21600 × $8.12) = $175,392
Variable cost of goods sold = $2,592,000 × 70% = $1,814,400.
Variable cost of goods sold per unit = $1,814,400÷ 336,000 = $5.4
Variable cost of goods sold for the special order = $5.4 × 21600 = $116,640.
Variable operating expenses = $840,000 × 80% = $672,000
$672,000 ÷ 336,000 = $2 per unit
21600× $2 = $43,200
$43,200 + $3,100 = $46,300
As shown in the incremental analysis, Moonbeam Company should accept the special order because incremental revenues exceed incremental expenses by $25,033.
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which market structure best describes (a) airplane manufacturing, (b) electricians in a small town, (c) farms that grow tomatoes, and (d) cable television in a city? why? part 2 airline manufacturing is part 3
Due to the small number of airline manufacturers, the market structure has an oligopoly nature. Due to the homogeneity of electrical work, it is completely competitive.
What types of market structures are examples?Market structure is the process by which different industries are grouped and distinguished based on the level and nature of the rivalry they experience for services and goods. The four most typical market configurations are oligopoly, monopoly, perfect competition, and monopolistic competition.
Which type of market organisation is ideal?In an ideal market structure, there are no transaction costs and both producers and consumers have complete and symmetrical information. Many producers and buyers are competing with one another in this kind of circumstance.
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On December 1, Hansen Co. borrows $100,000 cash from National Bank by signing a 90-day, 6% interest-bearing note. On December 31, Hansen will record an adjusting entry by debiting interest expense in the amount of ______.$4,500$500$1,500$6,000
Hansen will record an adjusting entry by debiting interest expense in the amount of $500
On December 31, Hansen will record an adjusting entry by debiting interest expense in the amount of
=$100,000*6%30days/360 days
$500
Interest is the fee you pay to borrow money or the cost you fee to lend cash. Interest is most often meditated as an annual percentage of the amount of a loan. This percentage is referred to as the hobby price on the loan.
The 3 styles of interest consist of simple (everyday) interest, accumulated interest, and compounding interest. when money is borrowed, normally through the method of a mortgage, the borrower is needed to pay the hobby agreed upon by way of the two events.
Fundamental interest approaches the fixed fee of hobby payable on the splendid stability of every loan on the relevant particular rate.
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sean is spending the day at the water park. he paid to enter the park and can use any water ride an unlimited number of times throughout the day. his favorite ride is the twisty river.
a. 50 or less utils. b. Sean now has a negative marginal utility. c. less often.
Utility is the pleasure experienced after using a product or service. When a consumer consumes an additional unit, their marginal utility increases, whereas their total utility is the sum of their levels of satisfaction after ingesting a certain amount of units.
With each additional unit obtained, marginal utility decreases. The marginal utility of Sean's second trip down the Twisty River is therefore probably lower than it was the first. Think about the first drink of water you take when you're extremely thirsty. The first drink you take is the most enjoyable one, and the final one is the least enjoyable.
Total utility will rise as long as marginal utility is positive. Consider Sean receiving marginal utilities of 50, 40, 30, and 10. After each ride, the overall utility is 50, 90, 120, and 130. His marginal utility has turned negative if, after the fifth ride, his total utility is just 115. (maybe he threw up).
Sean will probably take fewer trips down the Twisty River since his marginal utility declines with each additional unit taken and he is unlikely to continue spending the same amount of money when he is not experiencing the same level of satisfaction.
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The complete question is:
Sean is spending the day at the water park. He paid to enter the park and can use any water ride an unlimited number of times throughout the day. His favorite ride is the Twisty River.
a. Sean's marginal utility of riding the Twisty River the first time is 50 utils. Sean's marginal utility of riding the Twisty River the second time is likely
O greater than 50 utils.
O less than 50 utils.
O equal to 50 utils
b. If Sean's total utility begins to decrease after his fifth ride on the Twisty River, we can conclude
O Sean's marginal utility is starting to increase.
O Sean's marginal utility has become negative.
O Sean has maximized his marginal utility
c. Suppose instead of an entrance fee that Sean must pay each time he rides the Twisty River. Compared to the entrance fee, Sean will likely ride the Twisty River
O fewer times
O more times.
O the same number of times.