<span>According to the heckscher-ohlin theorem, trade arises are due to </span><span> Differences in relative factor endowments and intensities.
</span><span> Differences in relative factor endowments and intensities will create a different in prices between one nation and another. This difference will create a leverage for each nation to trade with one another in order to use their resource more efficiently.</span>
Answer:
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3.......
Answer:
1) When there is only one car dealership in a small town, giving the dealership the ability to influence the price of cars, market failure is due to <u>MARKET POWER.
</u>
2) When a manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream, market failure is due to <u>EXTERNALITY.</u>
Explanation:
The car dealership has an excessive market power
, which refers to the firms ability to increase the price of its products (cars) above the price of a competitive market.
When the manufacturing plant dumps chemical wastes into the river, it is causing a negative externality on the town's water supply. This means that the town (which is a third party in this case) is suffering from the actions of another party's economic transactions.
Answer:
$2,050,000
Explanation:
The computation of the initial cash flow for this project is shown below:
= Market value of the lot + estimated cost of the building
= $800,000 + $1,250,000
= $2,050,000
We simply added the market value of the lot and the estimated cost of the building so that the initial cash flow for this project could come
