Answer:
b) 100 cars per day.
Explanation:
With the information above, we can conclude that each worker washes 20 cars per day, and earns a wage of $60 per day.
So the total labor costs per day is $60 wage per worker X 4 workers = $240
The total sales revenue per day is: 80 cars washed per day X $5 per wash = $400.
So, we can see that with four workers, the firm has a good profit of = $400 - $240 = $160.
If the firm hired a fifth worker, labor costs would increase to $320 ($240 + $60), the amount of cars washed would increase to 100, and the sales revenue would increase to $500 (100 x $5).
So, profits would increase to $180 ($500 - $320) if the firm hired a fifth worker.
However, productivity should still be stable, so a worker who washed less than 20 cars per day should not be hired, this is why the A option is wrong.
Answer:
Italy has comparative advantage in production of stained glass
Sweden has comparative advantage in pounds of fish.
Italy can gain from trade if it receives more than 4 pounds of fish for stained glass.
Sweden can gain from the trade if it receives more than 1/10 stained glass for every pound of fish.
d. 6 pounds of fish per pane of stained glass.
Explanation:
Italy and Sweden both countries can produce stained glass and pounds of fish. Italy can produce 4 pounds of fish per pane of stained glass while Sweden can produce 10 pounds of fish per pane of stained glass. This means Italy has comparative advantage in production of pane of stained glass while Sweden has comparative advantage in pounds of fish.
Answer:
-1.8%
There would be a decrease in demand of 1.8%
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.
If cross price elasticity of demand is positive, it means that the goods are substitute goods.
If the cross-price elasticity is negative, it means that the goods are complementary goods
Cross price elasticity = percentage change in quantity demanded / percentage change in price
-1.8 = percentage change in quantity demanded / 1%
percentage change in quantity demanded = -1.8%
Answer:
<u><em>Units-of-activity Depreciation : $ 13,770</em></u>
<u><em>Double Declining Method Depreciation For the Second Year= $ 9120</em></u>
Explanation:
Formula: Units-of-activity Depreciation
Annual Depreciation= Depreciable Value×Units produced during the year/Estimated total production
<em><u>Annual Depreciation</u></em> = $ 51,000 * 27000/100,000
= $ 13,770
Depreciable Value = Original cost – Scrap value
<u><em>Depreciable Value</em></u> = $57000 - $6000= $ 51000
Formula : Double Declining Method
Double Of Straight Line Method Depreciation Rate = 2 * 1/10= 2* 10%= 20%
20 % of $ 57,000 for the first year= $ 11,400
<u><em>Depreciation </em></u>20 % of $ 45,600 for the second year= $ 9120
