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Anna [14]
3 years ago
5

Explain precisely why ‘Opportunity Cost’ is always a RELATIVE concept and is never to be construed in ABSOLUTE terms. In additio

n, why is the PPF function never strictly convex -what is the economic implication of strict convexity? You are free to provide appropriate examples of your choice.
Business
1 answer:
telo118 [61]3 years ago
3 0

Answer:

Opportunity costs are defined as the additional costs or benefits lost from choosing one activity or investment over another alternative. It is a relative concept because you cannot be 100% sure that the other investments or activities would have yielded a specific gain.

For example, when you calculate the economic cost of starting your own business, you consider your current salary as an opportunity cost. But what happens if you get fired (or the company closes), your opportunity cost would have been $0? Or how can you exactly measure your future salaries? Maybe in a couple of years you get promoted to manager, or maybe not?

The same applies to economies, since the opportunity cost of producing certain tradable goods is not always fixed, it might decrease or increase due to productivity or efficiency changes. But in order to calculate or determine we must include the most probable option.

In microeconomics, a strictly convex production possibilities frontier function must include a combination of both goods. In strict convexity, the second derivative f''(x) ˃ 0, so the PFF curve cannot be straight, it must have a slope.

When we calculate the opportunity costs of PPF, we usually try to determine which product has the lowest opportunity cost, but that is not an interior solution because both goods are not being produced (the curve is not strictly convex). On a strictly convex curve, as you approach the extremes the opportunity cost of producing one good is high, but on the center the opportunity cost is much lower.

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If a person invests in the stock market through a firm that pools funds from a large number of people and buys and professionall
alisha [4.7K]

Answer:

C. mutual fund.

Explanation:

Mutual fund refers to a company that pools money from many investors into securities such as stocks and bonds. Mutual funds provide the service of a deversified portfolio for customers who would otherwise been unable to diversify their portfolio themselves.

6 0
3 years ago
Larson Company on July 15 sells merchandise on account to Stuart Co. for $1,000, terms 2/10, n/30. On July 20 Stuart Co. returns
pickupchik [31]

Answer:

b. $588

Explanation:

Terms 2/10, n/30 means that 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

When Larson Company sold merchandise, the following entry was made to recording revenue (sales) and the receivable:

Debit Receivable Account $1,000

Credit Revenue $1,000

On July 20 Stuart Co. returns merchandise, the entry is made to record the decreasing of Receivable Account:

Debit Revenue $400

Credit Receivable Account $400

The balance Receivable Account of Stuart Co. = $1000-$400 = $600

On July 24, Stuart Co. makes the payment, the sales discount was:

$600 x 2% = $12

The amount of cash received = $600-$12=$588

The following entry is made:

Debit Cash: $588

Debit Sales discount: $12

Credit Receivable Account $600

7 0
3 years ago
Coursework beyond that of a bachelor's degree is known as interdisciplinary.<br><br> True<br> False
Marysya12 [62]

Answer:

false

Explanation:

6 0
3 years ago
On december 31, 2014, extreme fitness has adjusted balances of $940,000 in accounts receivable and $83,000 in allowance for doub
BaLLatris [955]
To record the write-off of receivables:

Allowance for doubtful accounts ----------------------------$24,000
            Accounts Receivable -----------------------------------------------$24,000

To record the accounts receivable collected from the written-off receivable, first restore the accounts receivable with the following entry:

Accounts Receivable ------------------------------------------$1,900
           Allowance for doubtful accounts ------------------------------$1,900

To record the collection of accounts receivable:

Cash -----------------------------------------------------------------$1,900
           Accounts Receivable ----------------------------------------------$1,900

Or, the direct journal entry to record the collection of previously written-off accounts receivable is: 

Cash ---------------------------------------------------------------$1,900
          Allowance for doubtful accounts ------------------------------$1,900
8 0
2 years ago
This year Nathan transferred $1 million to an irrevocable trust established for the benefit of his nephew. The trustee is direct
iren [92.7K]

Answer:

Zero- there is a $10 Million exemption equivalent ( d )

Explanation:

Annual exemption to be ignored = $15000

$1 million  to an irrevocable trust

taxable gifts = $6 million

A) The amount of gift tax Nathan must remit in 2017 ignoring annual exemption

The gift tax must remit in 2017 is zero because there is a $10 million exemption because of the annual exception ( even if the annual exception is ignored ) and  the lifetime benefits on taxable gifts that Nathan has is approximately $11.4 million, hence he wont be remitting any amount on gift tax in 2017

7 0
3 years ago
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