On the Planet Economus, There Are Only Two Goods in the Economy

question 34

Essay

On the planet Economus, there are only two goods in the economy. One of the goods is econoapples. The supply of econoapples is: The second type of good is the econoseed. The supply of econoseeds is: The demand for econoapples is: The demand for econoseeds is: Determine the equilibrium price and quantity of each good in the Economus economy. Suppose the world government of Economus implements a $1 tax on econoapples. Do econoapple consumers suffer any burden of the tax? Are econoseed consumers affected by the econoapple tax? How much tax revenue does the tax policy generate?

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Definitions:

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to products or job orders, based on a specific activity basis.

Variable Overhead

Costs that fluctuate with the level of production output, such as utilities or materials, unlike fixed overhead costs.

Total Overhead Variance

The difference between the actual overhead costs incurred and the overhead costs that were applied or allocated based on standard costing procedures.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the quantity that should have been used, valued at the standard cost.