Answer:
I. If labor and capital are perfect substitutes in production, the isoquant is a straight, downward-sloping line.
II. If a company needs to use inputs in fixed proportion such that the capital to labor ratio is always 2, the firm's isoquants are L-shaped.
Explanation:
Perfectly substittuable goods have straight downward sloping ICs, and have corner solutions
.
Complementary goods (used in fixed proportions) are L shaped always
, In case of min(x,y) function, the answer is the value of x or y which ever is minimum and not their sum.
Therefore, Only statements I and II are true.
Answer:
Lenders loose and borrowers gain
Explanation:
Whenever inflation increases the value of money falls and technically erodes interest rates (hence real interest rate falls although nominal rate stays the same)
In the scenario, if the inflation rate rises to 5.5%, then the real interest rate falls further from 1.5% to (5.75% - 5.5%) 0.25%, demonstrating that the lender is loosing further.
Contrarily, the borrower will technically be paying lesser interest to the lender because he will be paying lesser money in value to the lender both in terms of interest and principal
Answer:
The borrower is best off in situation <u>"a"</u> and the lender is best off in situation ▼ "C" .
Explanation:
Considering all the situations given in the options, the <u>borrower</u> is best in situation <u>a</u> and <u>lender</u> is best off in situation in <u>c</u>.
<u>Part a </u>
Real Interest rate = Nominal Interest rate - Inflation rate = 14 - 17 = -3 per cent. Thus, the purchasing power of money has fallen and the person has to pay back money with little purchasing power as compared to the value of the purchasing power at the time he borrowed money. Thus, borrowers are best off.Thus, <u>borrower</u> is best off when the inflation rate is very high.
<u>Part c</u>
Inflation rate is negative, thus the purchasing power of money will increase and lenders will get back money with higher purchasing power as compared to the value of the purchasing power of money at the time he lend the money. Thus, <u>lender </u>is best off when inflation rate is lowest.
James Wilson could achieve this objective by focusing on both cost reduction and revenue enhancement
What is Cost reduction?
Cost reduction is the procedure of lowering a business's expenses in order to increase profits. It entails locating and eliminating expenses that don't benefit customers in any way, as well as streamlining operations to increase productivity.
What is revenue enhancement?
The objective of any successful revenue enhancement strategy is to build and improve on current payment levels and then recover arrear debt. As indicated, this document seeks to identify causes for non-payment and to develop a strategy to address those challenges.
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If a supply chain manager can reduce inventory while keeping the flow rate constant, little's law predicts flow time will go down.
Little's Law is a theorem that calculates the average number of items in a stationary queuing system based on an item's average waiting time and the average number of items arriving at the system per unit of time.
The law establishes a straightforward and obvious method for evaluating the efficiency of queuing systems.
The notion is extremely important for business operations since it states that the number of items in the queuing system is determined primarily by two essential variables and is unaffected by other factors such as service distribution or service order.
Hence, the answer is that the flow time will go down.
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