Answer: Having lower opportunity costs.
Explanation: Opportunity cost can be defined as the cost of next best alternative foregone. In this case, James is saving his money by taking work of a professional from a new recruit also he gets the opportunity to procure high quality materials which he was earlier not able to. Thus, he is saving a major portion of income because of a less costly alternative available.
The correct answer is D.
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Answer:
B
Explanation:
Perpetuity formula for present for present value to be invested today
Pv = C /R
where c is the amount of continuous cash payment and R is the interest rate
PV = $ 15000 / 0.09 = $ 166666.67 approx $ 166667
Answer:
a. Italy has a comparative advantage in producing potatoes
Explanation:
Let us compute opportunity costs (OC).
In France,
OC of potato = 3000/9000
= 0.33 lemon
OC of lemon = 9000/3000
= 3 potato
In Italy,
OC of potato = 3000/3000
= 1 lemon
OC of lemon = 3000/3000
= 1 potato
France can produce potato at a lower OC than Italy, so France has comparative advantage in potato. Italy has a comparative advantage in producing lemons.
Trade is mutually beneficial if terms of trade (relative price) lies between the OC.
0.33 < Relative price of potato < 1 lemon, Or
1 potato < Relative price of lemon < 3 potato
Therefore, Italy has a comparative advantage in producing potatoes.
Answer: Individual income taxes are applied to a more narrowly defined set of income sources.
Explanation:
An individual income tax is a tax that is imposed by the governments on the income that is generated by individuals within the state. By law, all taxpayers must file the income tax return yearly to determine their tax obligations.
Payroll tax is the tax paid on the wages and salaries of the employees and they are used to finance social insurance programs, like Social Security and Medicare.
The difference is that the inividual income taxes are more narrowly defined set of income sources. Payroll is one of the sources of income while, the individual income is made up of other sources like rents, and the income from other business.
