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GuDViN [60]
3 years ago
14

Country X can cut, prepare, and export lumber using fewer worker hours than Country Y. Country Y can produce lumber but produces

cars more efficiently than it produces lumber. It also produces cars more efficiently than Country X. Which of these statements is accurate?
A. Country X will import Country Y's lumber due to absolute advantage
B. Country X will import Country Y's lumber due to comparative advantage
C. Country Y will import Country X's lumber due to comparative advantage
D. Country Y will import Country Y's lumber due to absolute advantage
Business
1 answer:
Thepotemich [5.8K]3 years ago
8 0

Answer:

The correct answer is option C.

Explanation:

Absolute advantage refers to the situation where a country or individual can produce at a relatively lower cost or using fewer inputs.

Comparative advantage refers to the situation where a nation or an individual can produce a good at a relatively lower opportunity cost.

Country X takes fewer labor-hours to produce lumber than country X while country Y can produce cars more efficiently.  

This implies that country X has a comparative advantage in producing lumber and country Y has a comparative advantage in producing cars.  

So country Y will import lumber from country X and export cars to them.

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Gain or loss from the sale of property must be calculated. The loss from foreclosure of property must be subtracted from wage income.
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2 years ago
The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An inv
jek_recluse [69]

Answer:

D. $0.93

Explanation:

Upmove (U) = High price/current price

                    = 42/40

                    = 1.05

Down move (D) = Low price/current price

                          = 37/40

                          = 0.925

Risk neutral probability for up move

q = (e^(risk free rate*time)-D)/(U-D)

  = (e^(0.02*1)-0.925)/(1.05-0.925)

  = 0.76161

Put option payoff at high price (payoff H)

= Max(Strike price-High price,0)

= Max(41-42,0)

= Max(-1,0)

= 0

Put option payoff at low price (Payoff L)

= Max(Strike price-low price,0)

= Max(41-37,0)

= Max(4,0)

= 4

Price of Put option = e^(-r*t)*(q*Payoff H+(1-q)*Payoff L)

                               = e^(-0.02*1)*(0.761611*0+(1-0.761611)*4)

                               = 0.93

Therefore, The  value of each option using a one-period binomial model is 0.93

8 0
3 years ago
An employee has gross earnings of $1,200 and withholdings of $91.80 for social security and medicare taxes and $120 for income t
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Given the following parameters:

The employer pays the employee (gross earnings) – $1,200

The employer pays for social security and medicare taxes – $91.80

The employer pays for the Federal Unemployment Tax Act (FUTA) – $9.60

The employer pays for the State Unemployment Tax Act (SUTA) –  $64.80


The total cost of this employee to the employer is the summation of all these costs
1,200 + 91.80 + 9.60 + 64.80 = $1366.20

3 0
3 years ago
At the end of the accounting period, houston company had $12,000 of par value common stock issued, additional paid-in capital in
amid [387]

The amount of stockholder's equity is calculated as -

Total stockholder's equity = Common stock issued + Additional paid in capital + Retained earnings - Treasury capital

Total stockholder's equity = $ 12,000 + 11,000 + $ 12,000 - $ 4,000

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8 0
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Differentiate between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting the preferred method f
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Answer:

Reason : To ensure constant flow of cash

Explanation:

<u>Accrual Basis of accounting</u> records transactions when they meet definition and recognition criteria of Assets, Liabilities,Equity, Expense and Incomes.

This is different from<u> cash-basis accounting</u> which records transactions at the receipt or payment of cash.

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8 0
3 years ago
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