All categories

2 years ago

What determines the value of an item? (Edg.)

Business

1 answer:

Snowcat [4.5K]2 years ago

6 0

Answer:

the amount of goods that are produced. -the capital required to build the factory. -the unlimited wants of the consumers. -the resources consumed in production.

You might be interested in

Assume that both labor and capital exhibit diminishing returns. Suppose you can hire an additional unit of labor for $10, and sh

anygoal [31]

Answer:

b) Nothing, because you are already minimizing cost

Explanation:

cost of producing one additional unit by hiring more workers = $10 / 50 units = $0.20 per unit

cost of producing one additional unit by buying the machine = $200 / 1,000 units = $0.20 per unit

Since labor exhibits a diminishing return, the next unit of labor will produce less than 50 units. This means that if you want to increase production, you should buy the machine.

Using the same logic, the previous units of labor were able to produce more than 50 units, which means that the average total cost was lower using labor than the machine. So if the company's concern is to minimize costs, then they are already doing so.

4 0

3 years ago

Suppose a small economy produces only two goods: books and shirts. The opportunity cost of 1 book is constant at 3 shirts. For e

Anastaziya [24]

Answer:

Books Shirts

4 0

3 3

2 6

1 9

0 12

Explanation: At combination E, the economy is producing 0 books and 12 shirts. Since the opportunity cost of 1 book is 3 shirts, moving from point E to point D (gaining 1 book) requires this economy to produce 3 fewer shirts. Thus, the number of shirts in combination D must be 12 shirts−3 shirts=9 shirts. The rest of the combinations can be calculated in a similar fashion, with the answers summarized in the following table.

A 4 3−3=0

B 3 6−3=3

C 2 9−3=6

D 1 12−3=9

E 0 12

8 0

2 years ago

(Inspired by the events in the Montreal cement market in 1966.) You are the CEO of Independent Cement (IC), and are considering

pychu [463]

Answer:

1) C.C. is currently selling at $ 12. So, if I.C.'s price is equal to C.C.'s it can sell to all the 400 customers. Hence, IC should keep the price at $12. The CC's price after price determination by IC will be $ 11 as doing so, CC will be able to sell to all 400 customers. Expected profits of IC will be as follows:

Sales =12 *400

Less : Marginal cost = 3*400

Expected profits = $ 3600

(2) If IC builds a small plant, then it can sell upto its capacity i.e. 100 units to 100 customers, if its price is no greater than IC. So IC can keep its price at $ 12. Expected profits of IC = 100 *12 less marginal cost i.e. 3*100 = $ 900.

As a result of above, CC will keep its price either 11 or 12.

Case 1( If CC's price is 11)

Expected profits = sales- marginal cost = 400* 11 - Marginal cost i.e. 4 * 400= 2800

Case 2 ( If CC's price is 12)

Expected profits = sales- marginal cost = 300* 12- Marginal cost i.e. 4* 300 =2400

So, CC's price would be $ 11 as it leads to maximisation of his profits

(3) The choice of size of plant will be dependent upon the profits and is driven by profit maximisation factor.

Case 1 ( If small plant is chosen)

Sales = 100 * 12

Less : Marginal cost = 100 * 3

Profits = $ 900

Case 2 ( If large plant is chosen, we should keep our price at 11 as CC would always keep the price at 11 , not 12 as it maximises its profit at 11)

Sales = 400 * 11

Less marginal cost : 3 * 400

Profits = 3200

Hence, large plant should be chosen

4 0

3 years ago

On July 1, 2018, an interest payment date, $148000 of Bramble Corp. bonds were converted into 2930 shares of Bramble Corp. commo

Mademuasel [1]

Answer:

There will be a $9,250 increase in paid-in capital in excess of par

Explanation:

Given:

Face value of bonds =$148,000

Unamortized Discount = $6,900

Common stock shares in conversion = $45/value share

Therefore, computed increase to be paid-in capital in excess of par will be given as (Bramble's record):

Book Value of Bonds = (Face Value of Bonds, $148,000) - (Unamortized Discount, $6900) = $141,100;

(Book Value of Bonds, $141,100) - (Value Assigned to Common Stock, $131,850(2930 Common Stock Shares in Conversion x $45 par value per share)) =

=$9,250 increase to Paid-In Capital in Excess of Par.

Note: value assigned to common stock = 2939 * 45 =131850

4 0

3 years ago

In time of rising prices, ending inventory determined using the LIFO inventory assumption will be ________ than ending inventory

Yuliya22 [10]

Answer:

LOWER

Explanation:

In time of rising prices, the inventory valuation made according to LIFO ( LAST IN FIRST OUT ) will be LOWER than the one valued according to FIFO ( FIRST IN FIRST OUT ) method.

The reason is that in LIFO, the newer stock is sold first, therefore, the remaining inventory is valued according to older purchases, that in inflationary context have lower prices.

6 0

3 years ago