Answer: The correct answer is option B; The student’s analyses is correct.
Explanation: A shift to the right of the supply curve indicates an increase in the aggregate supply or total market supply (which is due to certain factors). Producers only do this provided there would be an increase in market price. However, the equilibrium price would fall from P1 to P2. This follows the law of demand, that is, the higher the price the lower the quantity demanded.”
The fall in price would result in a new equilibrium price, P2. At this lower price level, consumers aggregate demand would also experience an increase, shown by a shift to the right in the demand curve. A new equilibrium price P3, would again be reached which would be convenient for both consumers and producers.
It is important to note that rational consumer behavior is such that a slight increase in price would discourage buying and vice versa. On the other hand, a rational producer is out to make profit and so a slight increase in price would encourage them to supply more and vice versa. Hence if the producers supply curve shifts to the right (an increase), it only means there is a price increase and if the consumers respond by reducing quantity demanded, then there has to be a new meeting point (new equilibrium price).
That explains the fall from equilibrium price P1 to equilibrium price P3.
Answer:
B. A stationary state in which growth will cease.
Explanation:
Malthus Thomas was a British economist that argued against the utopianism that the human race was believed to be tilting towards in his time. He argued that the every increasing human population that was seen as the happiness of a country will bring the economy to a shut down. He argued that available farmlands which is fixed will not be able to meet up with the ever increasing human population, stating that human population increases geometrically while food production from the fixed amount of farmlands increases arithmetically thus producing a stationary state in which growth will cease.
He was opined that at the end, human population will reach a point where they will not be able to produce enough food for themselves. However, his ideology has been criticized and disproved by other economists citing technology advancement and migration.
Answer:
False
Explanation:
Depreciation for on straight-line method:
Cost price: $ 95,000.00
Residual value: $ 5,000.00
Depreciable amount = $ 95,000- $ 5000
= $90,000.00
Depreciation per year= 1/5x 90,000
=0.2 x$ 90,000
=$18,000.00
Answer:
Total unitary manufacturing cost= $32
Explanation:
Giving the following information:
Direct materials $ 13
Direct labor $ 5
Variable manufacturing overhead $5
Fixed manufacturing overhead per year $90,000
Units produced= 10,000 units.
<u>The absorption costing method includes all costs related to production, both fixed and variable. </u>The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary fixed overhead= 90,000/10,000= $9
Total unitary manufacturing cost= 13 + 5 + 5 + 9
Total unitary manufacturing cost= $32
Answer:
Comparative advantage
Explanation
Comparative advantage is a theory that refers to the ability to produce products at a lower opportunity costs than others. This concept means that if a country is better than other producing two products, specialization still can happen as the second country can produce one of the products better and it will specialize as it has a comparative advantage and like that each country focuses on what they can produce more efficiently.
