Explain briefly why increasing or decreasing price artificially can decrease the supply of insurance
What will be an ideal response?
When insurance prices are decreased, companies will reduce writings to minimize the loss of profits or minimize losses. Since there has to be a level of capital to support premiums, all other factors the same, as prices increase, fewer policies can be written. Therefore, increasing or decreasing prices can both reduce the availability of coverage.
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J. O'Keefe and J. Kisha combined for a 50/50 partnership in 1980 and continued to do business successfully for many years. In January 2011, J. Kimley offered to contribute a sizable amount of working capital and was accepted as a partner in the business. J. O'Keefe and J. Kisha each own 40% of the business and J. Kimley 20% of the business partnership. Profits and losses are to be shared
according to these percentages. Due to the lagging economy and a sudden loss of profits, all three agree to liquidate the business and enjoy a gain on the sale of their major asset, which was purchased in 1981 . This should be distributed a. 50% to J. O'Keefe; 50% to J. Kisha. b. 40% to J. O'Keefe; 40% to J. Kisha; 20% to J. Kimley. c. equally among the three partners at the time of the sale. d. 100% into the partnership dissolution revenue account.
Suppose that Germany levies a tariff on oranges, but none are grown in Germany. This tariff has
a. only a protective effect. b. only a revenue effect. c. both a protective effect and revenue effect. d. no effects on trade.
Advertising and MPR efforts tend to work equally well, therefore
A) firms can choose one or the other, since they cost the same. B) organizations have a financial incentive to shift resources from advertising into MPR. C) companies can safely abandon other elements in the marketing communication mix. D) their effects will cancel each other out if used simultaneously. E) exposure levels are exactly the same among all media outlets.
Tustin Corporation has provided the following data for its two most recent years of operation: Selling price per unit$68 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials$10Direct labor$6Variable manufacturing overhead$4Fixed manufacturing overhead per year$220,000Selling and administrative expenses: Variable selling and administrative expense per unit sold$6Fixed selling and administrative expense per year$61,000 Year 1Year 2Units in beginning inventory01,000Units produced during the year11,00010,000Units sold during the year10,0007,000Units in ending inventory1,0004,000 The unit product cost under variable costing in Year 1 is closest to:
A. $46.00 B. $40.00 C. $20.00 D. $26.00