Answer: b. MB > MC or until they are equal.
Explanation:
It is best that Frieda produces bread at the level where Marginal benefits exceeds marginal costs. The difference will keep giving her more profit.
She should keep increasing her production so long as the Marginal benefit exceeds marginal cost but should stop at the level where the Marginal benefit and marginal cost become equal because producing past this point would mean that she would incur a marginal loss on each unit.
Answer:
$548
Explanation:
Calculation for the present value
Using this formula
= P / ( 1 + r ) ^ t
Where,
P represent Principal=1,000
r represent rate=12.78%
t represent Time= 5 years
Let plug in the formula
P=$1,000/(1+0.1278)^5
P=$1,000/(1.1278)^5
P=$1,000/1.825
P=$548
Therefore the present value of $1,000 to be received in 5 years is $548 if the discount rate is 12.78%.
Answer:
The detailed answer is given below;
Explanation:
The company has received an offer of $96,000 for equipment. It means that if the equipment is sold in market, it will fetch a revenue of $96,000.
Whereas the company is thinking for expansion option, in such case the cost of equipment for that project will $96,000 because as per definition of opportunity cost, this system if not used in expansion; can readily be sold out in market for $96,000.
Therefore the relevant cost for the project shall be $96,000 because this is the amount that Webster and Moore can loose if not sold in the market.
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Answer:
.a. import sweaters from Britain and export machinery to Britain.
Explanation:
A lower opportunity cost of manufacturing a particular goods means that a country uses fewer inputs in production compared to other nations. The country can produce more quantities of the product using similar factors of production. A lower opportunity cost in manufacturing will make a country's output cheaper compared to when that product is manufactured in other nations.
Varying production costs form the basis of international trade. A County imports commodities that are produced cheaply elsewhere and exports the goods it can manufacture at a lower cost. The united states can produce machinery at a lower cost than Britain. Britain will be prudent to import machinery from the united states rather than produce. Britain produces sweaters using fewer inputs that the US. The US will find importing sweaters from Britain more economical compared to manufacturing.
