Answer: Option (C) is correct.
Explanation:
A country has a comparative advantage in producing a commodity if the opportunity cost of producing that good is lesser in that country as compared to the other country.
From the information given in the question, it is clear that Alphaland has a comparative advantage in axes and Betaville has a comparative advantage in batons.
Hence, Alphaland will trade axes for batons only if the price of batons is lower than the cost of producing it in Alphaland. So that there is a possibility mutually beneficial trade.
Answer:
Yes
The order should be accepted as it will generate $3,300 as contribution
Explanation:
The relevant cost of the decision are the the contribution expected to be generated from the special order and any other avoidable fixed cost.
As it stands, there are no directly attributable fixed cost to product A. The allocated fixed cost of $90 is irrelevant to this decision. The cost will be incurred whether or not the special order is accept
Contribution from the order
=(50- 10-2-5) × 100 = $3300
The order should be accepted as it will generate $3,300 as contribution
Answer:
Raw material available for use= $1,150,000
Explanation:
Giving the following information:
Beginning Raw materials inventory= $320,000
Raw material purchased= $830,000
<u>To calculate the raw material available for use, we need to use the following formula:</u>
Raw material available for use= Beginning Raw materials inventory + Raw material purchased
Raw material available for use= 320,000 + 830,000
Raw material available for use= $1,150,000
The amount of cash dividends paid during the year would be $20,000 plus $25,000 = $45,000 which would fall within the $60,000 dividends received during the year so would be covered by that revenue and mean the stockholders would definitley receive their dividends.
Answer:
eliminated due to firms entering the industry
Explanation:
In the long run , monpolistically competitive firms earn zero economic profit due to entry of firms into the industry.
A monpolistically competitive firm has low barriers to entry and exit of firms. In the short run when monpolistically competitive firms earn economic profit, firms enter into the industry in the long run and economic profit would be wiped out.
Other features of monpolistically competitive firms are:
1. They sell differentiated products
2. They set the prices for their goods and services
3. They have a downward sloping demand curve.