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marta [7]
3 years ago
10

Assume that France and Morocco can both produce grain and dates, and that the only limited resource is the farming labor force,

meaning that land, water, and all other resources are plentiful in both countries. Each farmer in France can produce 20 metric tons of grain or 10 metric tons of dates in a season. Each farmer in Morocco can produce 25 metric tons of grain or 75 metric tons of dates in a season. Which of the following is true? a. Morocco has comparative advantage in producing dates b. France has comparative advantage in producing grain c. Morocco has absolute advantage in grain and dates d. All of the above
Business
1 answer:
SashulF [63]3 years ago
4 0

Answer:

The correct answer is option d.

Explanation:

Absolute advantage refers to the situation when a firm can produce more of a commodity at the same cost, or same level of commodity at a lower cost.

Morocco can produce 25 metric tons of grain and 75 metric tons of date.

While France can produce 20 metric tons of grain and 10 metric tons of date.

We see that Morocco can produce more of both the commodities so it has an absolute advantage in production of both grain and dates.

Comparative advantage refers to the situation when a country is able to produce a commodity at a lower opportunity cost.

The opportunity cost of producing a metric ton of dates for Morocco is

= \frac{what\ is\ sacrificed}{what\ is\ gained}

= \frac{25}{75}

= 0.2

The opportunity cost of producing a metric ton of dates for France is

= \frac{what\ is\ sacrificed}{what\ is\ gained}

= \frac{20}{10}

= 2

Morocco has a lower opportunity cost in producing dates so we can say that it has comparative advantage in producing dates.

The opportunity cost of producing a metric ton of grain for Morocco is

= \frac{what\ is\ sacrificed}{what\ is\ gained}

= \frac{75}{25}

= 5

The opportunity cost of producing a metric ton of grain for France is

= \frac{what\ is\ sacrificed}{what\ is\ gained}

= \frac{10}{20}

= 0.5

France has a lower opportunity cost in producing grains so we can say that it has comparative advantage in producing grains.  

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D. Opportunity cost.

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Read 2 more answers
EA10.
antoniya [11.8K]

Answer:

The question is incomplete; the complete question is given below.

                        Selling Price per unit Variable  cost per unit

Product                                     $                                  $

Snowboards                           20.00                       170.00

Skis                                  400.00                          225.00

Poles                                      50.00                 20.00

Salvador's contribution margin is  46.2%

Explanation:

Contribution is the amount generated from the sales of a product to cover part of the total fixed cost.

Contribution is an important concept in decision making because it helps to determine the profitability of individual products where a set of products benefit from the same fixed cost. <em>it </em><em>helps in prioritizing the allocation of resources to different products based on their profitability</em> .

Contribution per unit = Selling price per unit- variable cost per unit

Total contribution= Contribution per unit * units sold

Contribution margin ration: The proportion of sales realised as contribution is known as contribution margin ratio (CMR) . It represents the amount generated as contribution from every one dollar worth of sales.  A 60% margin means that $60 is made as contribution from evry sales of $100, for example.

It is a calculated as follows:

Single-product scenario:

C.M.R= contribution per unit/ selling price per unit

Multiple-products scenario:

C.M.R= contribution from a mix / revenue from a mix

We shall use the multiple-products formula

                                         Snowboard                 ski             Poles     Total

                                                   $                             $                $

Selling price                              320                     400                50

variable cost                        <u>    (170)                      (225)              (20)</u>

Contribution per unit (SP-VC)   <u>150                           175                30</u>

Cont from a mix (cont× unit)   1050                       525                 60

Revenue from a mix (SP× unit) 2240                    1200               100

Contribution margin ratio= Cont. from a mix/ Rev from a mix

                                           = (1050+525+60)/(2240+1200+100)

                                           =(1635 /  3540) × 100

                                            = 46.2 %

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3 years ago
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