Answer:
The correct answer is letter "C": the effect of the decrease in price on total revenue dominates the effect of the increase in quantity demanded on total revenue; overall total revenue declines.
Explanation:
Goods or services have inelastic demand when changes in prices do not affect their quantity demanded. If prices decrease or increase, the quantity demanded will remain at the same level or the change will be so minimal that it is not perceived. It is said then that <em>the decrease in price dominates the effect of the changes in quantity demanded.
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However, <em>if prices decrease and the quantity demanded remains the same, the company's overall revenue will decrease.</em>
Answer: C. will be favorable
Explanation:
Variable overhead efficiency variance simply means the difference between the time that it takes to manufacture a particular product and the time that was budgeted for the product.
Since the time incurred for the product was 2300 hours while the budgeted time was (600 × 4) = 2400 hours, then the variable overhead efficiency variance is favorable.
Answer:
it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.
Explanation:
A country has comparative disadvantage in production if it produces at a higher opportunity cost when compared to other countries.
The country with a comparative disadvantage can gain from trade by trading the good with a country that has comparative advantage in the production of that good. i.e. the country produces at a lower opportunity cost
For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.
for country A,
opportunity cost of producing beans = 5/10 = 0.5
opportunity cost of producing rice = 10/5 = 2
for country B,
opportunity cost of producing rice = 5/10 = 0.5
opportunity cost of producing beans = 10/5 = 2
Country B has a comparative disadvantage in the production of beans and country A has a comparative disadvantage in the production of rice
Country B should buy beans from A and A should buy rice from B
