Answer:
The correct answer is option C.
Explanation:
Italy and Sweden both produce jeans and stained glass.
Italy's opportunity cost of producing a pane of stained glass
= 4 pairs of jeans
Sweden's opportunity cost of producing a pane of stained glass
= 10 pairs of jeans
Since Italy has a lower opportunity cost of producing glass, so we can say that it has a comparative advantage in the production of glass.
Italy's opportunity cost of producing a pair of jeans
= 
= 0.25
Sweden's opportunity cost of producing a pair of jeans
= 
= 0.1
Sweden has a lower opportunity cost in the production of jeans, so it has a comparative advantage in the production of jeans.
So, Italy will produce and export glass and Sweden will produce and export jeans.
Both the countries will gain from trade if the trade price lies between their opportunity cost.
So the trade price will be 8 pairs of jeans per pane of stained glass.
The entry is required in the company's accounts debit cash ;Credit notes receivable and interest revenue.
If a business frequently trades in goods or services for notes, it would likely add a debit column for notes receivable to the sales book so that the general journal would not need to be used to record these transactions. It is also possible to build a separate subsidiary ledger for notes payable. A corporation should create a separate provision for bad debts account specifically for notes receivable if the quantity of notes receivable is substantial.
A note is considered to be honored when the maker pays it in accordance with the terms written down on it.
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Answer:
The interest rate on a 10-year corporate bond for a company with AA rating will be higher than for a 10-year bond for a company with a BBB- rating.
True
Answer:
The correct answer is option b.
Explanation:
When GM advertises its cars, it's trying to increase the demand for its cars.
An increase in the demand for a product is indicated by a rightward shift in its demand curve.
So advertising indicates that the company is trying to shift it's demand curve to the right.
A rightward shift in demand is caused by change in other factors while price of the product remains constant.
Answer:
a. equal to its marginal cost and grant a subsidy to cover the loss
Explanation:
In a competitive market there is allocative efficiency non fixing of prices.
The price of commodity is equal to it's marginal cost.
A socially optimal level of output is produced thereby demand will equal marginal cost.
A monopolist however will not set price that is equal to marginal cost normally. Instead they will less goods at a higher cost and charge higher price on it.
If a government wants to regulate a monopoly the best option will be for the monopolist to set a price equal to its marginal cost and government grant a subsidy to cover the loss
