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timofeeve [1]
3 years ago
8

Consider the following data on the factor endowments of two countries, A and B: Labor Force (millions of workers) 45 20Capital S

tock (thousands of machines) 15 10a. Which country is relatively capital abundant? b. Which country is relatively labor abundant? c. Suppose that good S is capital intensive relative to good T. Which country will have comparative advantage in the production of S? Explain.
Business
2 answers:
SCORPION-xisa [38]3 years ago
5 0

ANSWER

a . Relatively Capital Abundant Country : B

b. Relatively Labour Abundant Country : A

c. Comparative Advantage in Capital Intensive Good : B

EXPLANATION

Labour abundant country is a country whose labour endowment (ownership) is more , compared to other country .

Capital Abundant country has capital endowment more compared to other country.

In this case ,

Country A has 45Labour > 20L in country B So , is labour intensive.

Country B has 15 capital > 10 C

So , is capital intensive .

As per H.Ohlin Comparitive Endowment theory , Ricardo Comparitive Advantage theory :

A country should specialise in producing goods which uses its 'abundant' factor 'intensively' , because it has comparitive cost advantage in production of that good (being it abudant & hence cheap) .

So , S Capital Intensive good should be produced by Capital Abundant Country B

Similarly , labour intensive good should be produced by country A

Alexus [3.1K]3 years ago
4 0

Answer:

a. Country A

b. Country B

c. Country A

Explanation:

Given

For Country A

Labor force = 45 million = 45000000

Capital Stock = 15 thousand= 15000

For Country B

Labor Force = 20 million = 20000000

Capital Stock = 10 thousand = 10000

a. Which country is relatively capital abundant

A country is capital abundant if its endowment of capital relative to other factors is large compared to other countries.

We calculate the capital/labor ratio for each country.

For A, Ratio = 45000000÷15000 = 3000

For B, Ratio = 20000000÷10000= 2000

The Ratio of country A is greater than B.

So, A is capital redundant.

b. Which country is relatively labor abundant

A country is labour abundant if its endowment of labour relative to other factors is large compared to other countries.

We calculate the labor/capital ratio for each country

For A, Ratio = 15000÷45000000 = 0.000333

For B, Ratio = 10000÷20000000 = 0.0005

The Ratio of country B js greater than A

So, B is capital redundant.

c. Suppose that good S is capital intensive relative to good T. Which country will have comparative advantage in the production of S?

Heckscher–Ohlin theorem in the two-factor case, it states: "A capital-abundant country will export the capital-intensive good, while the labor-abundant country will export the labor-intensive good"

So, if product S is capital intensive relative to T then country A will have more advantage in production of product T to aid their exportation.

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Answer:

$132,300

Explanation:

The total manufacturing costs for the month can be calculated as follows

Direct labor + indirect materials + factory manager salary + indirect labour + direct materials + depreciation on factory equipment

= 40,600 + 16,200 + 8,200 + 10,000 + 7,300 + 41,500 + 8,500

= $132,300

Hence the total manufacturing costs if $132,300

7 0
3 years ago
The financial statements of the Pharoah Company report net sales of $372000 and accounts receivable of $56400 and $27600 at the
snow_lady [41]

Answer:

the average collection period for accounts receivables is 41.2 days

Explanation:

Average Collection Period measures the amount of time it takes to collect credit from accounts owing.

Average Collection Period = Average Accounts Receivables / (Sales/365)

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                                            = $42,000/1019.178082

                                            = 41.20967742

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8 0
3 years ago
Read 2 more answers
Acquiring Company is considering the acquisition of Target Company in a stock for stock transaction in which Target Company woul
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Answer:

1) 0.8333

2) 16,666

3) 2.33

4) 56.40

5) 2.2

Explanation:

Share Exchange Ratio = Price per share for Target Company / Market price per share for Acquiring Company  = $50 / $60  =  0.8333

New shares issued by Acquiring Company = Shares of Target Company x Exchange ratio (20,000 x 0.8333) = 16,666

Total shares outstanding of the combined companies = 60,000 + 16,666  = 76,666

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Post-merger share price = $2.35 x 24 (pre-merger P/E = $60.00/$2.50) = $56.40

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Therefore, Post-merger EPS of the combined companies = 132,000/60,000 = 2.2

6 0
3 years ago
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Answer:

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Self-imposed budgets typically are subject to review by higher levels of management in order to prevent the budgets from becoming too loose.

Self-imposed budget also known as the participative budget is a type of budget where individuals having responsibility for controlling costs, prepares their own budget estimates and present them to the top level of management for review.

3 0
3 years ago
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Margarita [4]
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make it more realistic

5 0
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