Answer:
11.3%
Explanation:
In this scenario a painting was bought at present value of $145,000 and sold at future value of $307,000. The time is 7 years in the future.
Return on investment is the gain on original cost of a project. A positive return on investment will result in profit of the project.
To calculate annual rate we use the following formula
Present value = Future value (1 + rate) ^ -number of years
145,000 = 307,000 {(1+r) ^ -7}
145,000/307,000 = (1+r) ^-7
0.4723 = (1 + r) ^ -7
1.113 = 1+ r
r = 0.113= 11.3%
Answer: for one more unit of good x traded-off , an additional unit of good y can be produced.
Explanation: The production possibilities frontier is graphed as a curve with one of the commodities is shown on the x-axis, while the other is shown on the y-axis. The curve is made up of points at which the two commodities are being produced in different amounts, most efficiently using the limited resources that they require with keeping the production factor and technology the same for both commodities. A production possibility curve or frontier represents different values of two good that an economy can produce ,keeping the production factor and the technology constant .
The slope of production possibility curve shows the opportunity cost I.e how much of good y has to be given up in order to produce an extra unit of good x . If the production possibility curve is a straight line , it means that the slope is constant I.e to produce an extra unit of good x , there’s constant opportunity cost of good y to be given up .
When there is a decrease in supply, it would be reflected by a change from Curve A to Curve C.
<h3>How are supply decreases reflected?</h3>
When supply decreases, it leads to the supply curve shifting to the left to show that there is a lesser quantity available.
In the graph therefore, a decrease in supply would be shown as a shift from Curve A to Curve C or Curve B to Curve A.
Find out more on decreases in supply at
#SPJ12