Answer:
7.5%
Explanation:
Cost savings
:
= Equipment cost - New machine cost
= 30,000 - 12,000
= 18,000
Depreciation per year
:
= Cost of automated bottling machine ÷ Useful years
= 120,000 ÷ 10
= 12,000
Simple rate of return:
= (Cost savings - Depreciation of new equipment) ÷ (cost - salvage of old)
= (18,000 - 12,000) ÷ (120,000 - 40,000)
= 6,000 ÷ 80,000
= 0.075
= 7.5%
Producers often pass along price increases to customer.
Answer:
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Explanation:
From the question, we have the following restated equation:

Where q is the output, and L and K are inputs
To determine the types of returns to scale, we increase each of L and K inputs by constant amount c as follows:

We can now solve as follows;


Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Answer:
D. trade-offs associated with financial decisions.
Explanation:
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Let's assume Martin can produce either 5 jeans or 10 shirts in one hour. If Martin decides to produce jeans instead, his opportunity cost are the shirts he trades off when he decided to produce jeans.
I hope my answer helps you
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