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avanturin [10]
3 years ago
12

Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. Assume that

the farmer and the rancher each has 24 labor hours available. If each person spends all his time producing the good in which he has a comparative advantage, then total production is_____________.
a. 4 pounds of pork and 8 pounds of tomatoes
b. 4 pounds of pork and 6 pounds of tomatoes
c. 6 pounds of pork and 8 pounds of tomatoes
d. 6 pounds of pork and 6 pounds of tomatoes
Business
1 answer:
dusya [7]3 years ago
3 0

Answer:

C) 6 pounds of pork and 8 pounds of tomatoes

Explanation:

Explanation:

            Labor hours to make 1 lb. of:          lbs. produced in 24 hours

                 Pork                  Tomatoes              Pork            Tomatoes

Farmer         6                            3                       4                       8

Rancher       4                            4                       6                       6

If both decide to specialize in producing only one good, the farmer will produce 8 pounds of tomatoes per day and the rancher will produce 6 pounds of pork per day.

This way when the rancher trades 4 pounds of pork in exchange for 6 pounds of tomatoes, he is gaining 2 pounds of pork which is equivalent to 8 labor hours.

When the rancher trades 6 pounds of tomatoes in exchange for 4 pounds of pork, he is gaining 2 pounds of tomatoes which is equivalent to 6 labor hours.

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3 years ago
The price of TSC stock will be either $42 or $46 at the end of the year. Currently, T-bills yield 4.1 percent and TSC sells for
const2013 [10]

Answer:

b. $.66

Explanation:

The computation of the per share value for the one year is

Given that

Current Price = $43

Possible Prices = $42 and $46

Now

u = [($46 - $43) ÷ $43] + 1

= 1.06977

And

d = 1 - [($42 - $43) ÷ $43]

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And,

Risk-Free Rate = T-Bill Rate = Rf = 4.1 %

Now the up move price probability is

= [(1 + Rf) - d] ÷ [u - d]

= [(1.041) - 0.9767] ÷ [1.06977 - 0.9767]

= 0.69088

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Now

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And

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= $1

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= [0.69088 × 1 + (1 - 0.69088) × 0] ÷ 1.041

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While the goods and services that are produced in the US and sold in some other country are exports for the US and imports for the purchasing country.

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