All categories

4 years ago

Plot the production frontier

Business

1 answer:

worty [1.4K]4 years ago

3 0

Answer:

Refer explanation.

Explanation:

A production possibility frontier is a graph that shows all the different combinations of output of two goods that can be produced by a specific country using limited resources and technology. It elaborates on the concept of trade-off, choice and scarcity.

a. Please refer Diagram attached.

b. Point X marked on the diagram is feasible because it is on the line. Any point on the line or inside is feasible since the country has the resources and technology to produce it. It is also efficient since any point on the PPF curve means that maximum output of a particular product is being produced using scare resources.

c. Opportunity cost is the benefit lost from the second best alternative. At point C, 2 cakes are being produced and 7 cookies are being produced. When an additional cake is produced (i.e. 3), the number of cookies produced is 3. Hence, the opportunity cost of producing an additional cake is 3 cookies (7-4).

d. At point E, no cookies can be produced but 4 cakes are being produced. When production moves to C, 2 cakes and 7 cookies are being produced. Thus, opportunity cost from point E to C is the loss of two cakes.

e. The law of diminishing returns is defined as that when additional increments of resources are added to a particular purpose, the marginal benefit gained from that purpose will decline. In the current case, at point E, when 4 cakes are being produced, 0 cookies can be produced. However, when one cake is sacrificed and those resources go into cookie production, 4 cookies can be produced (point D). This diversion of resources, causes a little loss to cake production but a larger gain to cookie production.

However, at the other end, at point B, when almost all resources are devoted to cookies, 1 cake is produced and 9 cookies. Devoting further to cookies would lead to only an additional of one cookie being produced, but also a loss of 1 cake, leading to no cakes to be able to be produced. The gains to cookie production from adding these last few resources are very little but the loss of cake production is large (100%). This shows the law of diminishing returns. It is important for economies to understand where production would have large gains and optimum amounts of both products can be produced.

You might be interested in

Which statement is TRUE regarding gross living area (GLA) in an exterior-only inspection appraisal for Fannie Mae

Rom4ik [11]

The appraiser must identify the data source for the GLA.

Is TRUE regarding gross living area (GLA) in an exterior-only inspection appraisal for Fannie Mae

Property valuation, property valuation, or land valuation is the process of creating a property valuation (usually market value). Real estate transactions are traded daily and, in contrast to corporate stocks that are identical, are infrequent and each property is unique (especially its condition, an important factor in valuation) and may require the valuation.

The location also plays a decisive role in the evaluation. However, real estate cannot be relocated, so it is often the upgrade or improvement of a home that can change its value. Evaluation reports are the basis for mortgages, real estate planning, divorce, taxation, and more. Valuation reports are sometimes used to set the sale price of a property.

In addition to various compulsory education levels from finance to civil engineering, most, if not all, countries require appraisers to be licensed to practice.

Learn more about Appraisal here: brainly.com/question/843074

#SPJ4

3 0

2 years ago

Stryder, Inc. has 3 million shares outstanding at a current price of $15 per share. The book value of the shares is $10 per shar

frosja888 [35]

Answer:

Market value of firm= $75,300,000

Explanation:

When a company issues shares, it exchanges it's equity for capital that is required to run its business. The outstanding shares of a company are the number of shares that the company has given out to shareholders.

Value of shares is used to estimate the companie's value.

To get the market value of the firm we use the following formula.

Market value of firm= market value of liabilities + market value of equities.

Market value of firm= (30,000,000* 1.01)+ (3,000,000* 15)

Market value of firm= 30,300,000+ 45,000,000

Market value of firm= $75,300,000

5 0

4 years ago

Other things the same, the effects of an increase in transfer payments on the government's budget deficit will lead to

BigorU [14]

Question Completion with Options:

A. greater investment.

B. All of the above are correct.

C. higher public saving.

D. a higher interest rate.

Answer:

Other things the same, the effects of an increase in transfer payments on the government's budget deficit will lead to

D. a higher interest rate.

Explanation:

When the government is operating a budget deficit, it means that its spendings are more than its tax revenues. It then resorts to issuing treasury bills and bonds to finance the deficit. This naturally reduces the price of bonds and raises interest rates. With rising interest rates, firms and individuals reduce their spending. The cost of borrowing becomes more expensive than before.

8 0

3 years ago

Is Social Security expected to be around when you retire?

muminat

Answer:

no i will not tell you

Explanation:

4 0

3 years ago

Name a US-based international company. Share with the class the ways this company is affected by a global market, including the

melisa1 [442]

Answer:

Answer explained below

Explanation:

Environmental Forces in International Markets

For many firms the question is not should we go overseas, but instead it is when should we go overseas. Examples of these firms include discount variety stores such as Wal-Mart or other firms like fast food restaurants such as McDonald's. The ability to spread their business to new places offers a whole new risk but with this risk comes the potential of great return. These firms however, must pay close attention to the environmental forces in international markets. These forces include socio-cultural, economic, and political, legal. and regulatory. Each of these forces has their own impact on how successful or how unsuccessful a firm can potentially become.

As we look at socio-cultural forces firms need to keep in mind that not ever place in the world thinks that same way that they do, and in this event they need to carefully study the behaviors of the people they will be presenting their business to. In an effort to do this firms must carefully know the culture of the people that will be shopping at their stores and tailor their business to fit their lifestyles. Examples of this can be seen though McDonald's. Some countries are more health conscience than others and if McDonald's wants to be successful overseas it must change its menu accordingly.

Modes Of Entry Into International Markets

Factors Influencing FDI

Foreign direct investment not only brings in capital, it also brings in latest technologies and modern management practices. Such investments are crucial to ensue that any country's industries would be able to create products and services in future that can be sold in international markets. As such FDI is important not just for the developing countries, it is also equally important for developed nations.Industrialized nations are among the largest recipient of FDI. Factors that are important for a country to attract FDI are give in the following;

Supply factors:

Lower production costs for certain products / industries compared with other countries attract foreign investment in those industries. Better logistics, warehousing and transportation infrastructure and systems (by air, sea or overland) also attract foreign direct investment. Abundant availability of natural resources and other factors of production lead to cheaper prices of these resources and may attract foreign direct investment.Firms also make foreign direct investment in foreign countries to access to key technologies

Demand factors:

Closer and good customer access also factors to bring in foreign direct investment. Advantages in marketing, being closer to customers, may also bring in FDI Firms may need to establish operations in foreign markets for exploiting of competitive advantages. Companies that have strong global brands may want to have full control over their brands in world markets and my engage in FDI for preservation of brand names and trade marks. Customers of firms are also often traveling / moving to foreign countries. Firms may also need to establish operations in foreign countries due to their customers mobility

Political factors:

Firms may also invest in foreign countries for avoidance of any trade barriers posed by the home of host countries. Home country or foreign country government may provide economic development incentives for FDI, encouraging firms to invest overseas

Name an international company.

Apple

Share with the class the ways a U.S. company is affected by a global market, including the international trade system, economies, governments, and cultural factors. Also discuss the different ways a company can enter international markets

The business world today is interconnected and interdependent as never before. The severity with which a crisis in Greece, a country that accounts for less than .5% of world

7 0

4 years ago

Plot the production frontier ​

Plot the production frontier