Answer: This is because the marginal rate of technical substitution is the ratio of the marginal product of labour to that of capital and for the output to be constant opportunity cost comes in, one input has to be reduced to increase the other input.
Explanation:
The marginal rate of technical substitution (MRTS) shows the amount by which the quantity of an input can be lowered when an extra unit of another input is utilized on order for the output to remain constant.
The marginal rate of technical substitution is likely to reduce as more capital is substituted for labor because the marginal rate of technical substitution is the ratio of the marginal product of labour to that of capital and for the output to be constant opportunity cost comes in, one input has to be reduced to increase the other input.
Answer:
The answer is =16.7%
Explanation:
Earnings before interest and taxes(EBIT) = $145,000
Tax rate is 25%
Therefore, the applicable tax rate on the earnings is 100% - 25% = 75%
So the Net income is 0.75 x $145,000
Net income = $108,750
The project is financed by 100percent equity and the cost is $650,000.
ROE(Return on Equity) = net income/equity
$108,750/$650,000
=16.7%
Answer:
The scarcity is the key problem that the economics are trying to find an answer to and try to mitigate by making the resources more productive.
The scarcity arises because of 2 main factors,
- The human wants are Unlimited
- The resources available to satisfy these wants are Limited
In theory, if we need to "eliminate" scarcity complete we should either Limit our Needs or find an Unlimited source of resources we require.
However, these are not practical solutions.
So because of this, economics try to utilize technology and other factors to harness the full potential of resources and to use them optimally.
Explanation:
