Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $252,000 (original
1 answer:
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Answer:
The correct answer is option a.
Explanation:
The purchasing power parity theory states that the exchange rate between the currency of the two countries is determined through the relative value of a basket of goods.
The exchange rate will be in equilibrium when the purchasing power in both the countries will be the same, or the price of the basket of goods is the same in both the countries.
The price of soccer balls in the US is $30.
The price of soccer balls in Mexico is $450 pesos.
The exchange rate should be
=
= 15
This means that each dollar is equal to 15 pesos.
Answer:
<h2>In this case,the answer would be option C. or The firm should increase capital and decrease labor, because labor produces less per dollar spent.</h2>Explanation:
- In this case,the productivity of labor for per dollar spent is less than the marginal productivity of telephone answering machine for per dollar spent.
- Here,one worker can handle an additional 10 orders per hour at the cost of $15 per hour.The productivity of labor per dollar spent by the firm or company=
.
- One answering machine can handle an additional 20 calls per hour at the cost of $10 per hour.Hence,the productivity of telephone answering machines per dollar spent by the firm or company=
.
- Hence,based on the comparison between the productivity per dollar spent,the firm or company hire more telephone answering machines and decrease the amount of labor to reduce the overall cost of production or operation.