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Orlov [11]
3 years ago
11

Consider two countries' situations: Country A can produce either six automobile ror twelve movies with the same amount of resour

ces. Country B, using the same resources, can produce either five automobiles or eight movies. Using Ricardo' Theory of Comparative Advantage, determine which country would produce automobiles, which would produce movies, and the range of relative prices within which these product would trade?
Business
1 answer:
Pachacha [2.7K]3 years ago
8 0

Answer:

The theory of comparative advantage says that nations should yield and trade only those merchandises in which they have a reasonable advantage i.e. which they are specialize in.

To compute the comparative advantage of two nations A and B, let us first compute the opportunity cost of making movies and vehicles in each.

Country A:

Opportunity cost of making 1 automobile = 2 movies

Opportunity cost of making 1 movie = 1/2 automobile

Country B:

Opportunity cost of making 1 automobile = 8/5 movies

Opportunity cost of making 1 movie= 5/8 automobile

Since the prospect cost of making an automobile is lesser in Country B and the prospect cost of making movies is lesser in country A, thus Country A would make movies and country B would make automobiles.

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Unemployment rate does not include those who have given up on finding a job.

Unemployment rate = Unemployed people / Labor force

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Purchasing a diamond represents ________ because consumeres buy diamonds infrequently and have no estabilished criteria for eval
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Pitney Co. purchased an office building, land, and furniture for $639,300 cash. The appraised value of the assets was as follows
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a).<u> Amount to be recorded on the books for each of the assets.</u>

                          Working                                                  Allocated cost($)

Land        (639,300 / 716,016 )x 136,043                                 121467

Building   (639,300 / 716,016 )x 179,004                                 159825

Furniture   (639,300 / 716,016 )x 400,969                              358008

Total                                                                                          639,300

b). <u>Statement model</u>

Assets : Cash + Land + Building + Furniture

            639,300 + 121,467 +  159825 + 358008

Cash flow = 639,300

c). <u>Journal entry</u>

General journal                        Debit($)           Credit($)

Land                                        121,467

Building                                   159,825

Furniture                                  358,008

Cash                                                             639,300  

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