Answer:
d) will become an importer of tomatoes.
Explanation:
Consumer surplus would increase because the price at which they buy tomatoes would reduce while producer surplus would reduce because the price of tomatoes would reduce as a result of international trade.
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.Because the price of tomatoes in the US is greater than the price of tomatoes in the world, when the US begins international trade, it would import tomatoes because it is inefficient in the production of tomatoes.
Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product
Answer:
The discount rate that makes the net present value equal to zero.
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
It is the discount rate that makes the net present value equal to zero.
I hope my answer helps you
Answer:
Annual savings = 61,746.
Explanation:
The Net Present Value (NPV) is the difference between the present value (PV) of cash outflows and PV of cash inflow
At the internal rate of return the PC of annual cash savings will be equal to the investment cost
Initial cost = 211980
PV = annual cash savings = A× (1- (1+r)^(-n)/ r
A=? r-internal rate of return, 14%, n-number of years- 5
211980 = A (1- (1.14)^(-5)/ 0.14
211,980 = A× 3.433080969
A= 211,980/3.43308
A= 61746.28619
Annual savings = 61,746.
Answer:
Utility increases at a decreasing rate.
Explanation:
Utility is the total satisfaction derived from consumptjon.
The utility function measures the total satisfaction derived from consumptjon.
Utility increases at a decreasing rate.
This can be illustrated with an example.
Imagine I am coming from a desert with no access to drinking water. I am very thirsty. The satisfaction I would derive from the first cup of water would be the highest. After my first cup, the utility I would derive from other cups would be diminishing.
