Charlotte owns a custom publishing business. She uses 500 square feet of her home (2,000 square feet) as an office and for stora
ge. All her business has come from telemarketing (telephone sales), direct mailings, or referrals. In her first year of operation, she has revenues of $37,000, cost of goods sold of $25,900, and other business expenses of $8,100. The total expenses related to her home are:
1 answer:
Answer:
As calculated below (attachment)She must deduct the expenses related to interest and taxes first, then deduct her other business expenses, then at last the depreciation.She may carry forward the $1,105 ($145 limit- $1,250 current depreciation) which she is not ble to use in the current year to a future year when her business has sufficient income to absorb the deduction.
Explanation:
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Answer:
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $12.50.
Wage Labor Demanded Labor Supplied
$12.50 375,000 625,000
This will result in a surplus of labor (625,000 higher than 375,000)
Which of the following statements are true?
- Binding minimum wages cause structural unemployment. As with all price floors, a deadweight loss results, because the quantity supplied is much greater than the quantity demanded. In this case, the price of labor is the wage, and the deadweight loss = structural unemployment
- In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium. Since a labor surplus exists, the price of labor should start to decrease in order to match the equilibrium price.
- If the minimum wage is set at $12.50, the market will not reach equilibrium. The quantity supplied of labor is much greater than the quantity demanded for labor resulting in a surplus.
