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
Mumz [18]
3 years ago
10

Suppose that Spain and Austria both produce oil and cheese. Spain's opportunity cost of producing a pound of cheese is 4 barrels

of oil while Austria's opportunity cost of producing a pound of cheese is 10 barrels of oil. By comparing the opportunity cost of producing cheese in the two countries, you can tell that has a comparative advantage in the production of cheese and has a comparative advantage in the production of oil. Suppose that Spain and Austria consider trading cheese and oil with each other. Spain can gain from specialization and trade as long as it receives more than of oil for each pound of cheese it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than of cheese for each barrel of oil it exports to Spain. Based on your answer to the last question, which of the following prices of trade (that is, price of cheese in terms of oil) would allow both Austria and Spain to gain from trade? Check all that apply. 1 barrel of oil per pound of cheese 16 barrels of oil per pound of cheese 9 barrels of oil per pound of cheese 7 barrels of oil per pound of cheese
Business
1 answer:
d1i1m1o1n [39]3 years ago
6 0

Explanation:

Spain's opportunity cost of producing a pound of cheese is

= 4 barrels of oil

Austria's opportunity cost of producing a pound of cheese is

= 10 barrels of oil

Spain's opportunity cost of producing a barrel of oil is

= \frac{1}{4}

= 0.25

Austria's opportunity cost of producing a barrel of oil is

= \frac{1}{10}

= 0.1

A country is said to be having a comparative advantage in the production of a commodity if it has a relatively lower opportunity cost of production.

Here, Spain has a lower opportunity cost of producing cheese, so it has a comparative advantage in producing cheese.  

Similarly, Austria has a lower opportunity cost of producing oil, so it has a comparative advantage in producing oil.

Spain can gain from trade as long as it is getting more than 4 barrels of oil for a pound of cheese.  

While Austria can gain from trade as long as it is getting more than 0.125 pounds of cheese for a barrel of oil.

Both will gain from trade if the price of the trade is  9 barrels of oil per pound of cheese and 7 barrels of oil per pound of cheese.

Spain will not accept 1 barrel of oil per pound of cheese and Austria will not pay 16 barrels of oil per pound of cheese.

You might be interested in
Rachel's health insurance plan requires that all tests and specialist visits be approved by her doctor. Rachel, most likely, has
lukranit [14]
The answer is b hope this helps 


3 0
2 years ago
Read 2 more answers
Mccrone Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 59 Manu
Karolina [17]

Answer:

$172,000

Explanation:

The solution of net operating income (loss) under variable costing in Year 1 is provided below:-

To find out the net operating income (loss) first we need to follow some steps which are as follows:-

Step 1

Total unit product cost = Direct material + Direct Labor + Variable manufacturing overhead

= $11 + $6 + $4

= $21

Step 2

Gross contribution margin = Sales - (Beginning inventory + variable cost of goods manufactured + Variable cost of goods available for sale - Ending inventory)

= ($59 × 10,000) - ( 0 + ($21 × 11,000) - ($21 × 1000)

= $590,000 - (0 + $231,000 - $21,000)

= $590,000 - $210,000

= $380,000

and finally

Net Operating income = Gross contribution margin - Variable selling and administrative expenses - Manufacturing - Selling and administrative expenses

= $380,000 - (10,000 × $4) - $88,000 - $80,000

= $380,000 - $40,000 - $88,000 - $80,000

= $172,000

To reach  we simply put the values into formula.

5 0
3 years ago
Emma, Inc. reacquired 166,326 of its shares at $22 per share as treasury stock. Last year, for the first time, Emma sold 37,992
Lesechka [4]

Answer:

The correct answer is $152,949.

Explanation:

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

Reacquired shares = 166,326

Per share price = $22

So, we can calculate the retained earning decline by using following formula:

Retained earning decline = Cost of Treasury shares - Sales price - Paid in Capital from stock

Where, Cost of treasury shares = 48,987 × $22 = $1,077,714

Now Sales Price = 48,987 × $15 = $734,805

and Paid in Capital from stock = 37,992 × ( $27 - $22) = $189,960

By putting the value in the formula, we get:

Retained earning decline = $1,077,714 - $734,805 - $189,960

= $152,949

6 0
2 years ago
Mortimer loves sushi. he loves sushi so much that he asks his congressional representative to work for passage of a binding pric
Flauer [41]

First option.

Indeed, some people may benefit by paying the artificial price, but not all as other people may not be able to satisffy all their demand as a price ceiling will also effectively create a shortage due to the low prices disincentivizing producers.

8 0
3 years ago
Wims, Inc., has current assets of $3,900, net fixed assets of $26,500, current liabilities of $3,400, and long-term debt of $7,5
STALIN [3.7K]

Answer:

equity = $19500

Explanation:

Given data:

current assets $3900

net fixed assets $26,500

current liabilities $3400

debt = $7500

Total liabilities = current liabilities + long term debt

                         = 3400 + 7500 = $ 10,900

Total assets = current assets + net fixed assets

                     = 3900 + 26,500 = $30,400

We know

total assets  = total liabilities + equity

30400 = 10900+ equity

equity = $19500

8 0
3 years ago
Other questions:
  • Tool Manufacturing has an expected EBIT of $65,000 in perpetuity and a tax rate of 21 percent. The firm has $190,000 in outstand
    7·1 answer
  • A substance has a mass of 360 g and a volume of 7.5 mL. What is its density?
    6·1 answer
  • One retail trend resulting from economic conditions is​ ________.
    8·1 answer
  • Susan picked up a package of potato chips and noticed on the front of the package the words, "0 grams of trans fat." She looked
    8·1 answer
  • Hawaiian Specialty Foods purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is ex
    5·1 answer
  • Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of ope
    14·1 answer
  • Cellular​ Access, Inc., a cellular telephone service provider reported net income of $ 253.8 million for the most recent fiscal
    15·1 answer
  • Using property she inherited, Lei makes a 2020 gift of $16,200,000 to her adult daughter, Doris. Neither Lei nor her husband, Gr
    6·1 answer
  • 3. 1.2 Explain how the looting of shops and malls will affect businesses in terms of the relationship between social responsibil
    10·2 answers
  • Agenda setting happens during the evaluation stage of the policy-making process.
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!