Answer:
1 bushel of corn
Explanation: Opportunity cost may be explained as the potential loss incurred by opting to go for an alternative option.
If it takes 2 acres of land to grow 200 bushels of corn
4 acres of land to grow 200 bushels of beans, then opportunity cost of one bushel of beans is:
Opportunity cost = (Return on best option not chosen - return on the option chosen)
Opportunity cost of one bushel of beans :
200 bushel of corn = 2 acres
I bushel of corn = (2/200) = 0.01 acres
200 bushel of beans = 4 acres
1 bushel of beans = (4/200) = 0.02 acres
0.02 acres used to grow 1 bushel of beans would have been used to produce 2 bushel of corn
Therefore opportunity cost = (2 - 1) = 1
Answer:
The company's CM ratio: 0.5
Its break-even point in units: 14,300 units and in dollars: $286,000
Explanation:
Variable expense per unit = Variable expenses/ number of units = $128,000/12,800 = $10
The contribution margin ratio is calculated by using following formula:
Contribution margin ratio = (Sales - Total Variable cost)/Sales = ($256,000 - $128,000)/$256,000 = 0.5
The break-even point is the level of production at which the costs of production equal the revenues for a product and calculated by using following formula:
Break-even point in units = Fixed expense/(Selling price per unit-Variable expense per unit) = $143,000/($20 - $10) = 14,300 units
Break-even point in dollars = 14,300 units x Selling price per unit = 14,300 x $20 = $286,000
Answer: increase; decrease
Explanation:
Assuming that both curves are of the same steepness, when the demand increases slightly, it will shift slightly to the right which will increase prices. However, should the supply significantly reduce, it would shift the Supply Curve significantly to the left. The new Equilibrium will see a higher price and a lower Quantity.
Explaining it in the real world. If people are now demanding more of a good but at the same time the number of goods reduced, that would cause a price increase because too many people are chasing too few goods. Also, the Supply decreased which translates to a lower Quantity produced.
If however, both supply has decreased by the same rate demand increased, the price would go up but the effect on the quantity of the good will be uncertain.
Answer:
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The answer for this question would be
A) Rationing or the first option.