Answer:
(C) Acquisition cost
Explanation:
The correct word for the given statement is acquisition cost
So option (c) is correct option
Acquisition cost alludes to the in with no reservations cost to buy a benefit. These expenses incorporate delivery, deals charges, and customs expenses, just as the expenses of site planning, establishment, and testing.
When securing property, obtaining expenses can incorporate looking over, shutting charges, and taking care of liens.
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Answer:
c. acquisition cost
Explanation:
Acquisition cost -
It refers to the amount necessary to buy any asset , is referred to as the acquisition cost .
The cost includes all the custom charges , taxes , shipping charges , testing , installation and preparation charges .
In case of acquiring any property , cost like , closing fees , surveying , paying off liens are also includes .
The total amount is the book value of the property or asset .
Hence , from the given scenario of the question,
The correct option is c. acquisition cost .
Antonio owns property on which a gasoline station once stood. Josh agrees to buy the land so that he can build an office on it. They include language in the contract making the purchase contingent on a determination that there are no environmental problems with the property. The contingency representsa. a condition subsequent.b. a concurrent condition.c. an implied condition.d. a condition precedent.
Answer:
The correct answer is letter "D": a condition precedent.
Explanation:
Condition precedents are certain conditions that must be met or provided so that an agreement or contract can be signed. Structurally speaking, a condition precedent implies "A" action must take place so that action "B" can happen. In that case, "A" represents the condition precedent.
At August 31, the end of the first month of operations, the usual adjusting entry transferring prepaid insurance expired to an expense account is omitted. Which items will be incorrectly stated, because of the error, on (a) the income statement for August and (b) the balance sheet as of August 31
Explanation:
The adjusting entry to record the prepaid insurance expired is shown below:
Insurance expense A/c Dr XXXXX
To Prepaid Insurance XXXXX
(Being insurance expense is recorded)
Since the insurance is expired, we debited the insurance expense and credited the prepaid insurance account
Since this adjusting entry omits that results
a. The expense account is understated due to which the net income is overstated
b. And, the prepaid insurance account is a asset account that would be overstated. As a result, the stockholder equity is also overstated
Salina, the expeditor at RingPro Gasket Manufacturer, writes a memo asking her manager to buy her a new computerized system for tracking customer orders. She claims that if she does not get this system, chronically late deliveries will ensue. Her manager turns down her request. Salina made the mistake of using?
Answer:
either/or logic.
Explanation:
Either/or logic is a form of logical fallacy that occurs when an individual believe that he/she only has one option in a certain situation, while overlooking any other possible solution that might be used.
We can see this in the example above.
Salina believed that if her manager does not buy her new computerized system for tracking customer orders, late deliveries will ensue.
The manager rejected the request because Salina overlooked other possible solutions.
For example, Salina could seek a help online to create a filing system from free programs. This way, she could make sure that the deliveries stay on time without having to buy a new computerized system.
Sasha works for a large corporation, and sometimes, she finds it difficult to see how she fits into the corporate picture. However, recently, her company decides to establish an employee stock ownership plan. Which is a benefit of this type of plan?
A. It allows employees to take over the management of the company.
B. It can make employees feel that their work benefits only the owners.
C. It can boost employee productivity.
D. It can build a partnership between managers and owners.
E. It can provide employees with higher regular wages.
Answer:
C. It can boost employee productivity.
Explanation:
Sasha's company decision to establish an employee stock ownership plan has the potential benefit of boosting employee productivity because staff members and people in general are motivated by rewards.
Employee stock ownership plan is a staff reward scheme where a company's employees are awarded shares of the company they work for, hence they become both staff and shareholders of that company.
Sometimes these plans are futuristic, they are awarded at a certain date in future if the company achieves certain goals. Hence the productivity of employees are boosted in the bid to boost the company's performance and achieve their share rewards
At the beginning of 2019, Florida Road Construction entered into a contract to build a road for the government. Construction will take 4 years. The following information as of 31 December 2009 is available for the contract:
1. Total revenue according to contract $10,000,000
2. Total expected cost $8,000,000
3. Cost incurred during 2009 $1,200,000
Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2009?
A. None.
B. $300,000.
C. $1,500,000.
Answer:
A. None
Explanation:
A is correct because Under the completed contract method, no revenue would be reported until the project is completed.
In 2011, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June 2014, when the stock’s fair market value was $7,000, Edwin gave this stock to his sister, Lynn. No gift tax was paid. Lynn died in October 2014, bequeathing this stock to Edwin, when the stock’s fair market value was $9,000. Lynn’s executor did not elect the alternate valuation. What is Edwin’s basis for this stock after he inherits it from Lynn’s estate?
a.$0
b.$5,000
c.$7,000
d.$9,000
Answer:
B) $5,000
Explanation:
Under Section 1014 (a) the basis of any property acquired by a decedent (Lynn) through a gift within 1 year of death and passed back to the donor (Edwin) due to the decedent's death, will be adjusted to the basis immediately prior to the death.
In other words, since Lynn died within 1 year of receiving Edwin's gift, Edwin's basis will be the same as Lynn's basis.
A woman marries her butler. Before they were married, she paid him $60,000 per year. He continues to wait on her as before (but as a husband rather than as a wage earner). She earns $1,000,000 per year both before and after her marriage. If GDP were changed so that it truly measured the sum of all final economic activity, the marriage would: first decrease and then increase GDP.
decrease GDP.
increase GDP.
leave GDP unchanged.
Answer:
D. Leave GDP unchanged
Explanation:
This is because the Husband is now involved in the category of "values of services not paid for". When calculating for GDP, those services aren't included or accounted for.
After marriage, the butler is no longer an employee of the woman and the services he provides for her now as an husband are not recorded as final economic activity thus the GDP decreases initially by $60,000 and then remains unchanged.
A point inside the production possibilities curve represents a combination of goods that is
Answer: EFFICIENT
Explanation: Production possibility Curve or frontiers is a graphical representation of the combination of two goods to give an efficient output or outcome considering the prevailing market conditions.
Production possibility Curve is used by business managers to determine which product combination can a business organization derive maximum or efficient benefits. A point in the curve of the production possibility Curve represents/ shows a combination of goods that is efficient considering the prevailing market conditions.
Chelsea, Inc. uses the job costing method and uses direct labor hours as the allocation base. In 2016, the total estimated and actual overhead costs for Job 3489 were $250,000 and $275,000, respectively. The total estimated and actual direct labor hours for Job 3489 were 25,000 and 28,000, respectively.Which of the following represents the MOH allocated to Job 3489?1. Predetermined MOH rate= total estimated manufacturing overhead costs/ total estimated amount of the allocation base2. $250,000/ 25,000 DLH= $103. MOH allocated to job= predetermined MOH rate * actual amount of allocation base used by the job4. $10 * 28,000 DLH= $280,000
Answer:
3. MOH allocated to job= predetermined MOH rate * actual amount of allocation base used by the job
Explanation:
3. MOH allocated to job= predetermined MOH rate * actual amount of allocation base used by the job
The predetermined overhead rate is used to apply manufacturing overhead costs to production jobs. the quantity of a cost driver required by a particular job is multiplied by a predetermined overhead rate to determine the amount of overhead cost applied to the job.
An estimate is made of
the amount of manufacturing over head that will be incurred during a specific period of time andthe amount of the cost driver ( or activity base) that will be used or incurred during the same time period. the predetermined overhead rate is computed as followsPredetermined Overhead Rate= Budgeted Manufacturing Overhead Cost/ Budgeted amount of cost driver
The predetermined overhead rate is used to apply manufacturing overhead costs to production jobs. The quantity of the cost driver ( or activity base ) required by a particular job is multiplied by the predetermined overhead rate to determine the amount of overhead cost applied to the job.
"Wayne Goodspeed falls in love with and buys a house for a price that is 5% more than the appraised value. He secures a 10% down loan for $220,000 which represents the appraised value less the 10% down. What was the purchase price, and how much did Wayne have to come up with in cash?
Answer:
Explanation:
Let the appraisal value be p.
.90 p = 220000
p = 220000 / .9
= 2,44,444
cash down payment = .1 x 244444
= 24444
Price of the house = 1.05 x 244444 ( 5% more than appraisal value )
= 256666.
Bartie's Inc. sells watercolors and pastels that are marketed as safe for use by children. However, several accounts of lead poisoning were reported in children who used the products. An investigation revealed that the company was knowingly manufacturing colors that contained a significant amount of a toxic heavy metal. Which of the following torts has Bartie's committed? A) negligence B) Negligence C) misrepresentation D) conceals a defect in a product
Answer:
C) misrepresentation
Explanation:
Misrepresentation is the act or offense which gives the nature of something as false or a misleading account of it.
The aim of a fraudulent action is to deceive an innocent party into believing something has extreme worth (or is worthless), something that the offender knows is inaccurate.Rescission and/or real damage are the solutions for misrepresentation. The complainant may seek cancelation and damages for dishonest and malicious misrepresentation.
Marketing involves which of the following : A. Advertising B. Transporting products C. Taking surveys D. All of the above
Ricardo is paid $21 an hour for the first 40 hours he works in a week. For each additional hour he works, he is paid 1.5 times his regular wage. How much will Ricardo earn if he works 46 hours in a week?
Answer:
Ricardo will earn $1,029
Explanation:
Regular wage: $21 an hour for the first 40 hours
If he works 46 hours
For the first 40 hours, his wage will be $21 × 40 = $840
Wage for each additional hour = 1.5 × regulate wage = 1.5 × $21 = $31.5
Wage for additional 6 hours = $31.5 × 6 = $189
Total wage = $840 + $189 = $1,029
Indicators of a possible asset or income concealment include all of the following except:
a. Missing, inaccurate, or damaged records
b. Travel to off-shore tax havens or locations that allow secret bank accounts
c. Transactions frequently made in cash but normally made on account
d. Unusual increases in reported assets
e. All of the above are indicators of a possible asset or income concealment
Answer:
The correct answer is D
Explanation:
The following are the possible assets or income concealment and that are as follows:
1.Travel to off-shore the tax havens or the locations which allow secret bank accounts
2. Damaged, missing or inaccurate records.
3. Unusual or rapid or fast reduction in assets
4. Unusually unexplainable or large payments to the vendors
5. Rise in the operating losses which are not explained by the economic factors.
6. Various transactions are made in cash, that are normally made on account.
Paula used to check her voice mail each time she returned to her office after a meeting or break. Now she checks her voice mail in the morning, before lunch, and once in the afternoon. What is one effect Paula can expect from having scheduled times to review voicemail messages each day?
A. Paula will have fewer calls to check.
B. Paula will improve her work efficiency.
C. Paula will improve her phone manners.
D. Paula will need to return fewer calls.
Answer:
B, Paula will improve her work efficiency
Explanation:
Scheduling times to review voicemail messages is a time management and efficiency improvement skill.
This is because Paula has maximum concentration/dedication on/to whatever task Paula is working on without having to interupt her flow by going through voicemail messages intermittently. This dedication/concentration brings about an improved work efficiency in Paula and she can acheive a lot more than when she had no voicemail review schedule.
Cheers.
Environmental Factors: As firms look overseas for opportunities, they must evaluate the global marketing environment before deciding whether or not to go global. The global marketing environment is complex and dynamic; therefore, a careful review of all types of factors must be completed. Drag each description to the appropriate environmental factor. Among European countries, Turkey currently ranks first in income inequality. Income inequality captures the difference between high-income and low-income households. Chinese consumers drink tea for a number of occasions including drinking tea at weddings and preparing tea for elders as a sign of respect.
China has very few existing coffee houses, and even fewer who serve an American-style coffee experience. Australia is often ranked as the world's most stable country due, in part, to the ease of doing business in Australia and a low level of government corruption.
A. Submit
B. Competitive
C. Economic
D. Cultural
E. Political-Regulatory
Final answer:
Assessing the global marketing environment involves categorizing different aspects like economic, cultural, competitive, and political-regulatory factors. Firms must consider a wide range of factors such as labor costs, proximity to suppliers and customers, and infrastructure quality, which are often more significant than potential savings from weaker environmental standards.
Explanation:
When assessing the global marketing environment, firms need to evaluate several environmental factors crucial for deciding whether to operate internationally. Dragging each description to an appropriate environmental factor, we can categorize them as follows:
Economic - 'Among European countries, Turkey currently ranks first in income inequality.' This reflects the economic environment as income inequality is an economic issue.
Cultural - 'Chinese consumers drink tea for a number of occasions including drinking tea at weddings and preparing tea for elders as a sign of respect.' This describes a cultural tradition specific to China.
Competitive - 'China has very few existing coffee houses, and even fewer who serve an American-style coffee experience.' This is a competitive factor considering potential market saturation and the nature of competition.
Political-Regulatory - 'Australia is often ranked as the world's most stable country due, in part, to the ease of doing business in Australia and a low level of government corruption.' This refers to the political and regulatory environment that significantly impacts business operations.
It's essential for firms to look at various factors beyond cost savings from weaker environmental standards, such as labor costs, proximity to suppliers and customers, and the quality of infrastructure. Ultimately, firms must consider these multifaceted aspects to make an informed decision on international expansion.
The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as: a. value chain management b. enterprise resource planning c. cost management d. customer value management
Answer:
C. Cost management
Explanation:
Cost management is a process or method of reducing cost of operation or production expenses of the business so as to provide cheaper goods and/or services to consumers.
It helps a firm forecast future expenditures in other to achieve their budgeting goals.
Alison is offered two jobs: one pays a salary of $45,000 per year and offers three weeks of vacation, while the other offer provides two weeks of vacation and a salary of $54,000. What is the opportunity cost for Alison if she chooses the job offer of $54,000?
Answer:
The answer is: Two weeks of vacation.
Explanation:
I took the test and that is the right answer.
XYZ Corporation is headquartered in the United States and is opening a new office in Singapore. The company decides to send a U.S. citizen, who is a senior manager at its U.S. office, to help set up the new office in Singapore. The senior manager is referred to as______ in Singapore.
Answer:
Expatriate
Explanation:
An expatriate is a professional who opts to works in another country other than his or her native country. To be regarded as an expatriate, the worker has to be highly skilled. He or she must be living and working in a foreign country.
An expatriate leaves their country to a different nation to provide specialized labor services, not for any other reason. The US citizen leaving for Singapore will be described as an expatriate. He is highly skilled and knowledgeable on the operations of XYZ corporations. The purpose of him being in Singapore is to offer his expertise to the new branch.
Sheridan Real Estate received a check for $28260 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $28260. Financial statements will be prepared on July 31. Sheridan Real Estate should make the following adjusting entry on July 31: O Debit Unearned Rent Revenue, $28260; Credit Rent Revenue, $28260. O Debit Cash, $28260; Credit Rent Revenue, $28260. O Debit Unearned Rent Revenue, $4710; Credit Rent Revenue, $4710. O Debit Rent Revenue, $4710; Credit Unearned Rent Revenue, $4710.
Answer:
The answer is Debit Unearned Rent Revenue, $4710; Credit Rent Revenue, $4710.
Explanation:
Rent revenue earned for the month is 28260/6= $4710 which should be credited to rent income account, whereas an adjustment for the revenue for the month must be made by debiting $4710 to Unearned Rent Revenue.
At Zara, clothes are ironed in advance and packed on hangers, with security and price tags affixed. This system means that employees in Zara stores simply move items from shipping box to store racks, spending most of their time on:
Answer:
The correct answe is: Value-added functions such as helping customers find what they want.
Explanation:
Customer service is a necessary investment in any company, as important as the product or service we sell.
The added value is the additional one offered to the customer for the purchase of one of their products or services. The objective is for the client to feel that he is obtaining greater benefits. Usually, value added is a rare feature in companies.
To the extent that a company is able to create a product or service that offers added value, it will have greater growth potential. This does not imply that other companies that are already underway cannot generate added value. Moreover, they are obliged to do so to differentiate themselves from their competition.
Generating added value in your products allows you to increase your prices, every time you give customers a product or service that is not registered in the competition.
An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing, might be the basis for its competitive advantage. However, reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy. Thus, the source of Zappos competitive advantage is said to be ___________.a. non-ambiguous
b. socially complex
c. inexhaustible
d. non-substitutable
Answer:
b. socially complex
Explanation:
When competitive advantage are based on such the source is said to be "socially complex". That is the ability for a firm to imitate another firm because of its resources and capabilities and this advantage might not yield positively in the long run.
Answer:
B) socially complex
Explanation:
When something is said to be socially complex, it means that it involves several aspects of human existence or in this case, corporate existence. As humans we deal with different phenomena in our cultures, e.g. immigration, conflicts, political movements, unions between individuals (formerly marriages), etc.
A socially complex organization has a strong and unique organizational culture, well defined and efficient leadership and strong interpersonal relationships between the internal actors (employees and management) and also with external actors (customers and their relationship with the organization).
That is why Zappo's organizational model is so hard to copy since you cannot replicate an organization's culture, you can only try to imitate it but the results may not necessarily be positive. What works for a society might not work for another, and the same applies to different companies.
On September 1, 2017, Halley Co. issued a note payable to Fidelity Bank in the amount of $2,700,000, bearing interest at 10%, and payable in three equal annual principal payments of $900,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal was made on September 1, 2018. At December 31, 2018, Halley should record accrued interest payable of:a. $ 54450. b. $ 80550. c. $181500.d. $ 89500.
Answer:
Neither of the options are correct because the correct answer is $60,000
Explanation:
The accrued interest payable is dependent upon the contract and in the contract timing of interests, principal payments and interest rates are agreed. So interest rate agreed must be used not the market rate. The interest accrued can be calculated on the principal amount not paid yet.
The first payment has been paid and the principal amount not yet paid is:
Principal amount not yet paid = $27,00,000 - $27,00,000/3 = $18,00,000
The interest accrued at the end of year relates to only 4 months (1 September to 31 December) which can be computed on principal amount not yet paid.
Interest accrued = 10% interest rate * 4/12 months * $18,00,000 principal amount unpaid
Interest accrued = 0.1 * 4/12 * $18,00,000 = $60,000
Answer:
accrued interest payable = $60,000
Explanation:
Since the first principal payment was done on September 1, 2018, by December 31, 2018, the principal's balance = $2,700,000 - $900,000 = $1,800,000
By December 31, Halley Co. had 4 months of interest payable (September, October, November, and December), so total accrued interest payable was:
principal x interest rate x periods = $1,800,000 x 10% x (4/12) = $60,000
Suppose that the hypothetical country of Andesland suffers from chronic scarcity of its staple grain, quinoa. True or False: The country of Andesland must be a developing country, since scarcity is not a problem in developed countries.
Answer:
False
Explanation:
Scarcity refers to a state wherein the resources available in a nation are not enough to satisfy the wants of it's people. Scarcity is less pronounced in developed nations, yet it exists.
For instance, water scarcity is common to both developed and developing nations. A nation may be really abundant in one resource say oil reserves and yet very deficient in other resources, which it needs to import to satisfy the wants of it's people.
In the given case, Andesland suffers from chronic scarcity of Quinoa. Merely on this premise, Andesland cannot be characterized as a developing nation as Scarcity is common to both developed and developing nations.
Hoover Corp., a wholesaler of music equipment, issued $20,000,000 of 20-year, 6% callable bonds on March 1, 20Y2, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.
Answer:
March 1, 20Y2. Bonds are issued.
Dr Cash 20,000,000
Cr Bonds Payable 20,000,000
September 1, 20Y2. Interest on the bonds are paid.
Dr Interest Expense 600,000
Cr Cash 600,000
The third part of the question was:
Journalize the following: September 1, year 20Y4, called the bond issue at 102, the rate provided in the bond indenture (Omit entry for payment of interest.)
September 1, 20Y4. Bonds are called.
Dr Bonds Payable 20,000,000
Dr Loss on Redemption of Bonds 400,000
Cr Cash 20,400,000
Explanation:
the interest paid = face value of bonds x interest rate x time = 20,000,000 x 6% x 6/12 = $600,000
The loss on the redemption of the bonds = $20,000,000 x 2% = $400,000
Final answer:
The question involves Hoover Corp.'s issuance of $20,000,000 of 20-year, 6% callable bonds to raise capital. Bondholders are entitled to annual interest payments and can take legal action if payments are missed, but full recovery is not guaranteed.
Explanation:
The student's question pertains to the issuance of callable bonds by Hoover Corp., a wholesaler of music equipment. When a large company like Hoover Corp. issues bonds, they are effectively borrowing money from investors who purchase these bonds. The bonds represent a promise to pay back the principal amount at a future date, along with periodic interest payments. In this case, Hoover Corp. issued $20,000,000 of 20-year, 6% callable bonds at their face amount, meaning that they will pay 6% interest annually on the principal amount until maturity or until the company decides to call back the bonds. If the company is unable to make interest payments, bondholders have the right to take legal action to recover their investments, although recovery is not guaranteed if the company's assets are insufficient.
On November 1, 20X1, Starbucks paid the rent of $90,000 for 40 of its stores in Colorado and Nebraska. The rent covers the period, November 1, 20X1 through March 31, 20X2. Assuming that Starbucks prepares quarterly financial statements, how much rent expense does Starbucks record on (i) November 1 and (ii) December 31?
Answer:
Part (1) November 1
The amount paid is the rental advances and must be recorded as advances which falls under the current asset category:
Dr Rental Advances $90,000
Cr Bank account $90,000
Part (2) December 31
On this date, some of the rental advances paid would be realized as expenses from the period November 1, 20X1 to December 31, 20X2.
This time duration constitutes to 2 months and the rental advance made on November were for five months. Out of these 5 months, 2 months share must be recognized as expense which is
The relevant entry would be:
Dr Rental Expenses $36,000
Cr Rental Advances $36,000
Claudia, a senior accountant, likes to work on her own and hence does not come out as a team player. She takes up all the work that may or may not be allotted to her. Instead of getting work done by her subordinates, she prefers to do it herself. In this scenario, which of the following is the most evident management mistake being committed by Claudia?A) Overmanaging
B) Being overly ambitious
C) Insensitivity to others
D) Inability to staff effectively
Final answer:
Option D. Claudia's action represents an Inability to staff effectively because she does not delegate to her team, hindering their development and potentially leading to her own burnout. Effective delegation is crucial for empowering employees and ensuring the success of the team.
Explanation:
In the scenario described, the most evident management mistake being committed by Claudia is D) Inability to staff effectively. By taking up all the work and not delegating to her subordinates, Claudia is not utilizing her team's capabilities, potentially leading to burnout and a lack of team development.
Delegating tasks allows subordinates to grow and learn, contributing to the overall success of the team and the organization. Claudia's actions indicate a reluctance to empower her team and distribute power equitably, which can reduce the productivity and motivation of employees, as well as increase their dependency on her, resulting in an inefficient managerial style.
"The best business portfolio is the one that ________.
A) provides the greatest opportunity for increasing profits
B) best fits the company's strengths and weaknesses to opportunities in the environment
C) ensures that the company will realize increased share of market
D) allows the company to decrease its overall costs
E) entices customers to purchase even more products from the company"
Answer:
The correct answer is option B,the business portfolio is the one that best fits the company's strengths and weaknesses to opportunities in the environment.
Explanation:
SWOT analysis is a performance appraisal technique that is used in analyzing organization based on its strengths and weaknesses (in internal environment) as a means to exploring opportunities and reducing threats from external environment.
The best a company can offer its customers in terms of products and services is that combination that maximizes it strengths and opportunities while also minimizing its weaknesses and threats.
According to Tom Duncan's basic categories of contact or touch points, which of the following best describes interactions that occur with a company or brand during the process of buying or using the product or service?A. Intrinsic touch points
B. Company created touch points
C. Unexpected touch points
D. Customer-initiated touch points
E. Distributive touch points
Answer:
A) Intrinsic touch points
Explanation:
A touch point refers to a situation where a consumer interacts with a company's. An intrinsic touch point happens when the consumer actually purchases or uses a company's product or service. It basically refers to the consumer's experience while using or buying a company's product.
This is the most important part of a marketing strategy since no matter how good and effective a marketing campaign is, how pretty the product is, etc., if the consumer doesn't like buying and using it, then the whole experience is ruined. Even a good product or service can be ruined if the buying experience was terrible, e.g. a bad waiter ruins a good meal.
A key factor that determines the geographic extent of a housing market is the distance that commuters are willing to travel from home to work. Which of the following events would NOT help to expand the geographic extent of the housing market in a metropolitan area?
Price of gasoline declines
State gasoline tax increases
Public transit fares decrease
None of these
Answer:
State gasoline tax increases
Explanation:
As commute distance to place of work is an important factor in the housing market, an increase in steel gasoline tax will make people pay more to commute. Since they are sensitive to the cost incurred when commuting, they will try as much as possible to reduce the distance they travel to work.
This results in contraction of geographic extent of the housing market in metropolitan areas.