1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anestetic [448]
3 years ago
6

Suppose we have a 2-person world, with only Stephen and his friend LeBron. Suppose that Stephen can move 70 boxes or bake 28 coo

kies in an hour. Suppose that LeBron could move 24 boxes or bake 6 cookies in an hour. Is trade possible?
a. No, trade isn’t possible, because LeBron has an absolute advantage in both making cookies and moving boxes.
b. Yes, trade is possible. Stephen should move boxes while LeBron makes cookies, because Stephen has a comparative advantage in moving boxes, whereas LeBron has a comparative advantage in making cookies.
c. Yes, trade is possible. Stephen should make cookies while LeBron moves boxes, because Stephen has a comparative advantage in making cookies and LeBron has a comparative advantage in moving boxes.
d. No, trade isn’t possible, because Stephen has an absolute advantage in both making cookies and moving boxes.
Business
1 answer:
PIT_PIT [208]3 years ago
3 0

Answer:

Option (c) is correct.

Explanation:

Stephen can move 70 boxes or bake 28 cookies:

Opportunity cost of moving a box = (28 ÷ 70)

                                                         = 0.4 cookies

Opportunity cost of baking a cookie = (70 ÷ 28)

                                                         = 2.5 boxes

LeBron could move 24 boxes or bake 6 cookies:

Opportunity cost of moving a box = (6 ÷ 24)

                                                         = 0.25 cookies

Opportunity cost of baking a cookie = (24 ÷ 6)

                                                             = 4 boxes

Yes, trade is possible.

Stephen has a comparative advantage in baking cookies because of the lower opportunity cost than LeBron, so he is specialized in baking cookies.

On the other hand, LeBron has a comparative advantage in moving boxes because of the lower opportunity cost than Stephen, so he is specialized in moving boxes.

You might be interested in
on july 1, the knit shop paid $9,000 to townsend realty for 6 months’ rent beginning july 1. prepaid rent was debited for the fu
lubasha [3.4K]

Answer:

debit Rent Expense, $1,500; credit Prepaid Rent, $1,500.

Explanation:

6 0
2 years ago
Candy Claws Company gathered the following reconciling information in preparing its August bank reconciliation: Cash balance per
Alchen [17]

Answer:

c. $23,160

Explanation:

Adjusted cash balance per books as at August 31

Cash balance per book $19,500

Add Notes receivable and interest collected by bank $4,800

($19,500+$4800) $24,300

Less:(Deposits in transit $900

-NSF check 1,020) ($120)

NSF check (1,020)

Cash balance per books $23,160

6 0
3 years ago
1) Why might investors prefer floating rate notes over a fixed rate bond?
sladkih [1.3K]

Answer:

These questions are incomplete since the article relating to Hologen company is not attached. However, I would answer them this way.

Explanation:

1) A floating rate bond has a shorter duration; almost zero and it has lower sensitivity to interest rates compared to a fixed rate bond.This means that the former has a lower interest rate risk. Investors tend to demand floating rate bonds when they expect future interest rates to rise because their prices would be close to their par values as their interest rates would also increase. On the other hand, fixed bond's interest rates are inversely related to their prices.

2)

For an issuing company, borrowing money floating rates terms could be riskier for cashflow management purposes . Every time interest rates increases, it means that the company would pay higher interests to lenders which could hurt its profitability. The fluctuations could also negatively affect future financial planning unlike issuing fixed rate bonds whose coupon payments are constant hence decreasing the volatility of earnings.

8 0
3 years ago
A social environment is BEST described as:
jeka57 [31]

Explanation:

The social environment, social context, sociocultural context or milieu refers to the immediate physical and social setting in which people live or in which something happens or develops. It includes the culture that the individual was educated or lives in, and the people and institutions with whom they interact.

5 0
2 years ago
Read 2 more answers
All the long-term debt of a government, including the long-term debt that will be financed by Enterprise Fund revenues, is repor
Studentka2010 [4]

Answer: False

Explanation:

False.

Long term debt is a debt owed by an economic entity which could either be the inividual, a business or the government and such debts are expected to mature in a period of at least one year.

It should be noted that the long term debt isn't reported in fund level financial statement but rather it's reported in government wide statements.

3 0
3 years ago
Other questions:
  • At Emmerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal
    7·1 answer
  • Describe two disadvantages of early forms of money, and explain how they could have been fixed.
    15·2 answers
  • One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods
    13·1 answer
  • On January 1, 2018, equity account balances are as follows: Preferred Stock $ 500,000 Common Stock 1,000,000 Paid-In Capital in
    11·1 answer
  • if the price of a product increases from R200 to R250 then demand falls from R450 to 300 units.Calculate PED and determine the d
    5·1 answer
  • When cash is received from a stockholder in exchange for common stock, the transaction is recorded by debiting Cash and creditin
    15·1 answer
  • Assume just for this question that the portfolios have identical betas, but one has high investment-specific risk (standard devi
    8·1 answer
  • Suppose a coalition of students from Lincoln High School succeeds in persuading the local government to impose a price ceiling o
    12·1 answer
  • Jodi is retiring at the age of 65. When she retires, she estimates that she will need a monthly income for 25 years. If Jodi sta
    6·1 answer
  • A worker who loses a job at a call center because the company moved the call center operations to another country is an example
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!