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padilas [110]
2 years ago
13

Suppose there is a simple two good economy that produces fish and cars. When the economy increases its production of fish from 0

to 15 tons of fish, it has a relatively small opportunity cost in terms of cars. What is the most likely explanation for this?
Business
1 answer:
Veseljchak [2.6K]2 years ago
7 0

Answer:

The most likely explanation for the relatively small opportunity cost that the economy incurs as a result of increasing production of fish from 0 to 15 tons is that the economy will lose some of the benefits it derives from the production of cars now that more resources have been committed to the production of fish.  It is like a question of not being able to "eat your cake and have it."  Something must give way.

Opportunity cost is an economic cost that an entity or individual bears when it forgoes one option in preference to another.  Once there is a choice between two options, economists will always recognize the forgone benefits from the other option a consequence of the loss.

Explanation:

When economists refer to the “opportunity cost” of a resource, they imply that the value of the next-highest-valued alternative resource will be lost.  This means that a cost is incurred by not enjoying the benefit associated with the best alternative choice.  A consideration of opportunity cost is, therefore, an assessment of the relative risk of each option vis-a-vis its potential returns.

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Command economy

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A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $2,700 and is
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Answer:

$720 and $180

Explanation:

According to the scenario, computation of the given data are as follows:

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So, Premium for manufacturing operation = $900 × 80% = $720

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Bono was kicked out of the band U2 for failing to attend rehearsals on time and constantly cutting the strings of Adam Clayton b
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2 years ago
Brewster's is considering a project with a life of 5 years and an initial cost of $120,000. The discount rate for the project is
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Answer:

Net present value 27.792‬

Explanation:

<u>Sales</u> 2.100 units x 20 net cash flow =<em> $ 42,000 cash flow per year</em>

<u>Present value of the first three years:</u>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 42,000

time 3 years

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42000 \times \frac{1-(1+0.12)^{-3} }{0.12} = PV\\

PV $100,876.9133

For year 4 and 5 we need to check for the expected cashflow

<u>We will multiply each outcome by their probability:</u>

1,400 units x $20 per unit x 0.5 chance =  14,000

2,500 units x $20 per unit x 0.5 chance = 25,000

expected return:    <em>39,000</em>

<u>present value of these years:</u>

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  $39,000.0000

time   4 end of year 4th

rate  0.12

\frac{39000}{(1 + 0.12)^{4} } = PV  

PV   24,785.21

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  $39,000.0000

time   5 end of year 5th

rate  0.12

\frac{39000}{(1 + 0.12)^{5} } = PV  

PV   22,129.65

<u>Net present value</u> will be the present value of the cash flow less the investment.

100,877 + 24,785 + 22,130 - 120,000 = 27.792‬

7 0
3 years ago
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