The opportunity cost of manufacturing televisions is lower in country a.Opportunity cost, which is the gain a person, business, or government will have to forfeit when they pick one choice over another, is essential to the notion of comparative advantage.
Comparative advantage in economics refers to the ability of a nation to generate goods or services at a lower opportunity cost than rivals.In his work "The Principles of Political Economy and Taxation," David Ricardo introduced the concept of comparative advantage (1817). If country a has a lower opportunity cost for producing televisions than country b, then country a has a comparative advantage over b in the production of television.Even if another country has an absolute advantage in producing all items, a country with a comparative advantage can create a good at a lower opportunity cost. Say, for illustration, that a nation could only create three different kinds of goods.X, Y, and Z are the products.
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Answer:
The Total amount is shown in the income statement $34,240
Explanation:
The computation of the amount that should be presented in the 2020 income statement is shown below:
Dividend collected by Howdy Doody corporation (18% of $68,000) $12,240
rise in Fair value of Stock credited to the income statement ($74,000 - $52,000) $22,000
The Total amount is shown in the income statement $34,240
How does a subsidy affect supply?
A subsidy by nature increases the purchasing power of the individual or class it is awarded to. It's like free money that can only be spent on certain things.
Answer:
The price of the bond is closest $101.36
Explanation:
It is noteworthy that a rational investor pays for a bond today the cash flows derivable from the bonds in future discounted to today's terms.
The future cash flows comprise of the yearly coupon interest of $5.5(5.5% *$100) for 3 years as well as the repayment of the principal $100 at the end of year 3.
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 5% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading $ 101.36 present value today.
