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3 years ago

Reasons why countries avoid specialization

Business

1 answer:

Romashka [77]3 years ago

4 0

Answer:

Countries specialize in order to increase their trade. Imagine a country that has specialized in rubber production and suddenly other more efficient synthetic products have replaced rubber. That means that the demand of rubber has fallen. This would create the country to face labor unemployment, lack of trade for rubber, a long period of stagnant growth indirectly effecting the economy adversely.

Therefore countries prefer to go along with trade and avoid specialization so as to avoid period of stagnant growth.

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Anvisha [2.4K]

Answer:

rudr6ityoxr6%eusrzt

Explanation:

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3 years ago

Salt Company is considering investing in a new facility to extract and produce salt. The facility will increase revenues by $220

e-lub [12.9K]

Answer:

12%

Explanation:

Annual net income:

= Increase in annual revenue - Increase in annual costs

= $220,000 - $160,000

= $60,000

Average investment:

= (Initial investment + Salvage value at the end) ÷ 2

= (980,000 + 20,000) ÷ 2

= $500,000

Annual rate of return:

= (Annual net income ÷ Average investment) × 100

= ($60,000 ÷ $500,000) × 100

= 12%

5 0

3 years ago

Marine Expeditors has three divisions. Division A is the core of the business and represents 80 percent of the firm's operations

siniylev [52]

Answer: 100%

Explanation:

The Weighted Average Cost of Capital calculates the required return needed to fund any of the company's projects because it shows the cost of capital of raising funds for that project.

The cost does not increase or decrease based on the proportion of a business that a department is as any department/ project will incur that cost. The cost of the new project will therefore be the same as the company WACC.

8 0

3 years ago

Suppose that a firm's production function is given by Q = KL(MPK = L and MPL = K), where Q is the quantity of output, K is units

Lelechka [254]

Answer:

Please find the detailed answer as follows:

Explanation:

Q = KL

Wage = 30

Rent or price per unit of capital = 20

a) A firm minimizes its cost at the point where marginal rate of technical substitution is equal to the ratio of the prices of inputs.

So, marginal rate of technical substitution = marginal product of labor / marginal product of capital = wage / rent

K / L = 30 / 20

K / L = 1.5

K = 1.5L

Q = KL

Putting the value of Q = 600 and K = 1.5L in the above equation,

600 = 1.5L x L

600 = 1.5L2

L2 = 600/1.5 = 400

L = 20 is the answer.

K = 1.5L

K = 1.5 x 20 = 30 is the answer.

So, 20 units of labor and 30 units of capital should be used by firm to minimize the cost of producing 600 units of output.

A firm minimizes its cost at the point where marginal rate of technical substitution is equal to the ratio of the prices of inputs.

So, marginal rate of technical substitution = marginal product of labor / marginal product of capital = wage / rent

K / L = 30 / 20

K / L = 1.5

K = 1.5L

Q = 1.23KL

Putting the value of Q = 600 and K = 1.5L in the above equation,

600 = 1.23 x 1.5L x L

L2 = 600 / (1.23 x 1.5)

L2 = 325.2

L = 18 approximately or rounded off.

K = 1.5L

K = 1.5 x 18 = 27

Total cost = (wage x units of labor used) + (rent x units of capital used)

= (30 x 18) + (20 x 27)

= 540 + 540 = 1080 is the answer.

8 0

3 years ago

Assume the following information pertaining to Moonbeam Company: Beginning Ending Finished goods inventory $ 148,000 $ 140,200 W

ale4655 [162]

Answer:

$905,800

Explanation:

Calculation for Cost of goods sold

Total manufacturing costs $ 920,000

Add Begining Work in process inventory 97,000

Less Ending Work in process inventory (119,000)

Cost of goods manufactured $898,000

Add Begining Finished goods inventory $148,000

Less Ending Finished goods inventory$ (140,200)

Cost of goods sold $905,800

Therefore the Cost of goods sold is calculated to be: $905,800

3 0

3 years ago

Reasons why countries avoid specialization​

Reasons why countries avoid specialization