A semi-variable cost:
A. Increases and decreases directly and proportionately with changes in volume.
B. Changes in response to a change in volume, but not proportionately.
C. Increases if volume increases, but remains constant if volume decreases.
D. Changes inversely in response to a change in volume.
Answers
Answer:
B. Changes in response to a change in volume, but not proportionately.
Explanation:
A semi variable cost (or mixed cost) is a cost or expense that is partially fixed (does not change according to production output) and is also partially variable (changes according to production output). An example of semi variable costs are utilities which have a fixed minimum level per month and they increase as production output increases. Another example is the cost of a car, where insurance and lease payments are fixed but gas and maintenance expenses vary according to the number of miles driven.
Related Questions
Super Saver Groceries purchased store equipment for $44,500. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $4,500. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Super Saver used the equipment for 1,400 hours the first year.Required:Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.)1. Straight-line.2. Double-declining-balance.3. Activity-based.
Answers
Answer:
1) Using straight line method , depreciation for first year is $4,000
2) Using double declining balance , depreciation for first year is $8,900
3) Using activity based method, depreciation for first year is $5,600
Explanation:
Given:
Cost = $44,500
Useful life = 10 years
Salvage value = $4,500
Useful life in hours = 10,000 hours
Super Saver used the equipment for 1,400 hours the first year.
1) Straight line method
Depreciation for first year = (cost - salvage value) ÷ useful life
= $(44,500 - 4,500) ÷ 10
= $4,000 per year
2) Double declining balance
Depreciation rate = (100 ÷ useful life) × 2
= (100 ÷ 10) × 2
= 20%
Depreciation for first year = $44,500 × 20%
= $8,900
3) Activity based
Rate = cost - salvage value ÷ useful life in hours
= ($44,500 - $4,500) ÷ 10,000
= 4 per hour
Depreciation for first year = 1,400 × 4
= $5,600
what is the tragedy of the commons?
a. economic loss of individuality
b. overuse of shared resources
c. hoarding of public resources
d. when a boss only drops common loot and no rare drops
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2. Problem Statement: Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities has been determined. The life of the warehouse is expected to be 12 years, and MARR is 15%/year.
City Initial Cost Net Annual Income
Lagrange $990,000 $50,000
Auburn $710,000 $155,000
Anniston $850,000 $270,000
What is the annual worth of each site? (Round answers to the nearest dollar; tolerance is +2.00)
Answers
Answer:
City Annual worth($)
Lagrange (132,635.97)
Auburn 24,018.65
Anniston 113,191.34
Explanation:
Annual worth of each site is the equivalent annual cost . It is determined by dividing the net present value of cost by the annuity factor of the investment period.
Net Present Value of cost = Initial cost - Present Value(PV) of annual income
PV of annual income = Annual income × Annuity factor
Annuity factor = (1 - (1+r)^(-n))/ r
r 15%, n -12
Annuity factor = (1 - 1.15^(-12))/0.15= 5.4206
PV of annual income = 50,000 × 5.4206= 271,030.9499
Net Present Value of cost = 990,000 - 271,030.94 = $(718,969.05 )
Annual worth= $(718,969.05 )/ 5.4206= (132,635.97)
Auburn
PV of annual income = 155,000× 5.4206= 840,195.94
NPV = 710,000 - 840,195.94 = 130,195.94
Annual worth = 130,195.9448/ 5.4206= 24,018.65
Anniston
PV of annual income = 270,000× 5.4206= 1,463,567.13
NPV = 850,000 - 1,463,567.13 = 613,567.12
Annual cost = 613,567.12 /5.4206= 113,191.34
City Annual worth
Lagrange (132,635.97)
Auburn 24,018.65
Anniston 113,191.34
How are state Insurance Guaranty Associations funded?
Answers
Every state has a guarantee fund that is created by legislation. To safeguard policyholders in the event that an insurer goes bankrupt or is unable to pay its debts, a state's insurance commissioner maintains guarantee funds.
It is possible for a borrower to approach a bank for a loan since a guarantee fund offers a loan or credit guarantee. When a borrower lacks adequate security, such as real estate or other assets, guarantees can be quite helpful. The lack of (enough) collateral is practically universal among small borrowers. Guarantee insurance entails that an insurance firm, rather than a bank, provides a guarantee to your business.
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12. If an individual has a credit score of 560 and they pay their credit card late once or twice, what might they expect a credit card company to do?
A. Close their account.
B. Offer them a lower APR to lower payments
C. Send the account to collections
D. Increase the APR to 24% or higher and charge a late fee
Answers
They expect a credit card company to Send the account to collections they expect a credit card company to. Thus option C is correct.
What is a credit card?A sort of line of credit offered by banks seems to be a credit card, which enables users to borrow money up to a pre-approved available credit. Users can use it to transact in the purchasing of goods as well as services.
As this is because the late payment of anything will not appear on the credit card report. This was to make sure that the people will have a chance to pay.
As the late payment will not affect the credit score. There will be someone who will be present for the collection of the payment. Therefore, option C is the correct option.
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Question 5
The Elements of Supply Chain are:
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Answer:
The elements of a supply chain include all the functions that start with receiving an order to meeting the customer's request. These functions include product development, marketing, operations, distribution networks, finance, and customer service. (I hope this helped!!! Have a great day!!)
the standard time required per unit of a product is 20 minutes. in a day of 8 working hours a worker gives an output of 30 units. if he gets a time rate of ` 20 per hour his total earning under halsey bonus scheme is
Answers
The bonus earned by the worker would be 30% of 2 hours, which is equal to 0.3 * 2 * $20 = $12.
The Halsey bonus scheme is a productivity-based incentive system that provides workers with a bonus based on the time saved in completing their assigned tasks. Under the Halsey bonus scheme, the worker receives a percentage of the time saved as a bonus.
In this scenario, the standard time required per unit of a product is 20 minutes, which is equivalent to 1/3 of an hour (20/60). The worker is able to produce 30 units in a day of 8 working hours, which means the total time taken for production is 30 units * 1/3 hour per unit = 10 hours.
Since the worker works for 8 hours in a day, the time saved is 10 hours - 8 hours = 2 hours. According to the Halsey bonus scheme, the worker is entitled to a percentage of the time saved as a bonus. The Halsey system typically allocates 30% of the time saved as a bonus.
Therefore, the bonus earned by the worker would be 30% of 2 hours, which is equal to 0.3 * 2 * $20 = $12.
In summary, under the Halsey bonus scheme, the worker's total earning would include the regular wages for 8 hours of work, which is 8 * $20 = $160, along with the bonus earned, which is $12. Hence, the worker's total earning under the Halsey bonus scheme would be $160 + $12 = $172.
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On May 10, a company issued for cash 1,100 shares of no-par common stock (with a stated value of $2) at $15, and on May 15, it issued for cash 5,000 shares of $15 par preferred stock at $59. Journalize the entries for May 10 and 15, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank. May 10 May 15
Answers
Answer:n Please see explanation column
Explanation:
To record issue of common stock
Date Account Debit Credit
May 10 Cash $16,500
Common stock $2,220
Additional paid in excess of par common stock $14,430
to record issue of preferred stock
May 15 Cash $295,000
Preferred stock $75,000
Additional paid in excess of par preferred stock $220,000
Calculation.
Cash received = no of shares issued x issue per share
=1100 x $15= $16,500
Common stock = Number of share issue x stated value per share = 1,110 x $2 =$2,220
Additional paid in capital= Number of shares issue x ( issue per share - stated value per share )= 1,110 x ($15-$2)= 1,110 x $13 = $14,430
Cash = no of shares of preferred stock x issue per share
= 5000 x $59= $295,000
par value at preferred stock n = Number of share preferred issue x stated value per share n= 5000 x 15 =$75,000
Additional paid in capital= Number of sharesof preferred stock issue x ( issue per share - stated value per share )= 5,000 x ($59-$15)= 5,000 x $44 = $220,000
Oakley bakes muffins that he sells at the local farmer's market. If he purchases a new convection oven that reduces the costs of baking muffins, the asupply of Oakley's muffins will increase. b. supply of Oakley's muffins will decrease. c. demand for Oakley's muffins will increase. d. demand for Oakley's muffins will decrease.
Answers
According to the given statement supply of Oakley's muffins will decrease.
The correct option is B.
What is called market?The entire number of market participants in the region or region under review is referred to as the market. Earth, as well as several nations, regions, states, and cities, may be the subject. The worth, expense, and cost of the goods traded depend on the dynamics of supply and demand on the market.
What is marketing plan?A marketing strategy is a long-range plan for attaining a business' objectives via a knowledge of client demands and the development of a distinct and long-lasting competitive advantage. It includes everything, from choosing which channels to utilise to contact your consumers to figuring out who they are.
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Mike’s Motors Corp. manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company borrows to meet this requirement, at a cost of 2% interest per month (paid at the end of each month). Any cash balance above $30,000 at month-end is used to repay loans. The cash balance on July 1 is $32,000, and the company has no outstanding loans at that time. Forecasted cash receipts and forecasted cash payments (other than for loan activity) are as follows.
Cash
Receipts Cash
Payments
July $ 83,000 $ 111,000
August 109,000 97,900
September 148,000 125,400
Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)
Answers
Answer:
Mike's Motors Corp.
Cash Budget for July, August, and September:
July August September Total
Beginning balance $32,000 $30,000 $30,000 $32,000
Cash receipts 83,000 109,000 148,000 340,000
Bank borrowings 26,000 0 0 26,000
Total receipts 141,000 139,000 178,000 $398,000
Cash Payments 111,000 97,900 125,400 334,300.00
Interest 520 308.40 828.40
Loan repayment 10,580 15,420 26,000.00
Total payments 111,000 109,000 141,128.40 361,128.40
Minimum cash balance 30,000 30,000 36,871.60 36,871.60
Explanation:
a) Data and Calculations:
Cash Receipts Cash Payments
July $ 83,000 $ 111,000
August 109,000 97,900
September 148,000 125,400
Minimum cash balance = $30,000
Interest on borrowings = 2% per month
July ending:
Borrowing to maintain minimum cash balance = $26,000
Interest for August = $520 ($26,000 * 2%)
August ending:
Loan balance = $15,420 ($26,000 - $10,580)
Interest for September = $308.40 ($15,420 * 2%)
6. The following data summarize the operations during the year. Prepare a journal entry for each transaction. A. Purchase of raw materials on account: $3,000 B. Raw materials used by Job 1: $500 C. Raw materials used as indirect materials: $100 D. Direct labor for Job 1: $300 E. Indirect labor incurred: $50 F. Factory utilities incurred on account: $700 G. Adjusting entry for factory depreciation: $250 H. Manufacturing overhead applied as percent of direct labor: 200% 1. Job 1 is transferred to finished goods J. Job 1 is sold: $3,000 K. Manufacturing overhead is over applied: $100
Answers
A company's financial transaction must be recorded as a journal entry, which includes a debit and a credit.
These journal entries are used to record the following transactions:
A. Purchase of raw materials on account: $3,000 - Debit Raw Materials Inventory $3,000; Credit Accounts Payable $3,000
B. Raw materials used by Job 1: $500 - Debit Work-in-Process Inventory $500; Credit Raw Materials Inventory $500
C. Raw materials used as indirect materials: $100 - Debit Manufacturing Overhead $100; Credit Raw Materials Inventory $100
D. Direct labor for Job 1: $300 - Debit Work-in-Process Inventory $300; Credit Wages Payable $300
E. Indirect labor incurred: $50 - Debit Manufacturing Overhead $50; Credit Wages Payable $50
F. Factory utilities incurred on account: $700 - Debit Manufacturing Overhead $700; Credit Accounts Payable $700
G. Adjusting entry for factory depreciation: $250 - Debit Manufacturing Overhead $250; Credit Accumulated Depreciation $250
H. Manufacturing overhead applied as a percent of direct labor: 200% - Debit Work-in-Process Inventory $600; Credit Manufacturing Overhead $600
I. Job 1 is transferred to finished goods - Debit Finished Goods Inventory $500; Credit Work-in-Process Inventory $500
J. Job 1 is sold: $3,000 - Debit Accounts Receivable $3,000; Credit Sales $3,000; Debit Cost of Goods Sold $500; Credit Finished Goods Inventory $500
K. Manufacturing overhead is over-applied: $100 - Debit Cost of Goods Sold $100; Credit Manufacturing Overhead $100
In conclusion, a journal entry records a financial transaction by debiting one account and crediting another account. When preparing a journal entry, it's important to ensure that the total of debits equals the total of credits.
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what budgeting tips would you help to stay on track financially
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it was something like
whatever i have in my bank account right now, i can only spend 10% of it on something
say i want to buy a house. i will only spend %10 of my total bank balance
which of the following statements is true? group of answer choices oil is classified as part of the resource category land. a person working for a company is classified as part of the resource category capital. a machine in a factory is classified as part of the resource category land. a person with the particular talent for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things is classified as part of the resource category labor. a and d
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Oil is viewed as a land asset, as oil is normally happening in the old rocks of the earth in this way are called raw petroleum happens in crude structures. Around 84% of oil holds happen in offshores.
The complete assessed oil repository of the oil depends on the geologic information acquired from the oil wells. With approx, 4.1 million barrels of oils are held in essential stores.
Strategies for the assessment of oil in places are Volumetric techniques, material equilibrium techniques, and creation decline bend strategy. New exploration recommends that the oil saves have been tracked down in Canada and the Antarctic circle.
Most extreme stores have been tracked down in Venezuela, Saudi Arabia, and Canada as these terrains have extraordinary stores of mineral sand and sedimentary stone.
Therefore oil is the land resource.
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Alana has just joined a chapter of FBLA-PBL. Which of the following skills will she most likely gain with FBLA-PBL?
A. Cooking skills
B. Writing skills
C. Athletic skills
D. Public speaking skills
Answers
Public speaking skills will she most likely gain with FBLA-PBL. Thus option (D) is correct.
What are skills?A skill is the acquired capacity to move with deliberate intent and good execution, frequently in a pre-determined window of time or energy or both. Domain-general and domain-specific skills are two common categories of skills.
Through creative leadership and professional development programs, FBLA-PBL aims to foster a productive working partnership between business and education. Career exploration, community service, economic education, and the development of technical skills are all examples of extracurricular activities.
Therefore, Thus option (D) is correct.
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With some exceptions, it is a criminal offense for a minor to:
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With some exceptions, it is a criminal offense for a minor to engage in certain activities, such as:
1. Purchase or consume alcohol or tobacco products.
2. Drive a car without a valid driver's license.
3. Vote in an election.
4. Serve on a jury.
5. Work in certain hazardous occupations.
6. Enter into a binding contract.
7. Get a tattoo or piercing without parental consent.
8. Possess or use firearms.
9. Run away from home without parental consent.
10. Engage in sexual activity with an adult.
11. Commit certain crimes.
The specific laws and regulations regarding minors vary by state and country, so it is important to check the relevant laws in your area. Minors are individuals who are under the age of majority, which varies by location but is typically 18 years old. Because minors are considered to be legally incapable of making certain decisions, there are laws and regulations in place to protect them from harm and ensure that they are not taken advantage of.
For example, it is illegal for a minor to purchase or consume alcohol or tobacco products because these substances can be harmful to their health and development. Similarly, minors are not allowed to drive a car without a valid driver's license because they may not have the necessary skills and experience to operate a vehicle safely.
Other activities, such as voting, serving on a jury, or entering into a binding contract, require a certain level of maturity and responsibility that minors may not yet possess. In some cases, minors may be allowed to engage in these activities with the consent of a parent or legal guardian.
In general, the laws and regulations regarding minors are designed to protect their health, safety, and well-being, and to ensure that they have the opportunity to grow and develop into responsible adults.
By comparing prices at different stores, consumers will:
Answers
By comparing prices at different stores, consumers will save money and make informed purchasing decisions.
How can comparing prices at different stores benefit consumers?Comparing prices at different stores allows consumers to make informed purchasing decisions and save money. By taking the time to research and compare prices, consumers can identify the best deals and discounts available for the products they intend to buy.
This practice helps them ensure that they are getting the most value for their money. It can also help consumers uncover any price discrepancies or inflated prices allowing them to avoid overpaying for goods and services.
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Which is the difference between static storage systems and dynamic storage systems
Answers
Answer:
In a static storage area each product is assigned a specific area, whereas in dynamic storage, product locations and fluid and as such are subject to change.
you recently increased you're spending on marketing by 10%. you now spend 5500 per month. revenue increase by 1000 per month and you're gross margin percentage is 70%. All other expenses stayed consant. Did the increase pay off?
Answers
Answer:
Answer is yes
Explanation:
What is the rate of return on an investment of $10,606 if the investor will receive
$2,000 each year for the next 10 years?
The rate of return on the investment, r, is %. (Round to two decimal places.)
Enter your answer in the answer box.
?
Answers
Answer:
The annual rate of return on this investment is 18.85%.
Explanation:
Given that the investor will receive an annual return of $ 2,000 through an investment of $ 10,606, to determine the rate of return of this investment it is necessary to perform the following calculation:
10,606 = 100
2,000 = X
((2,000 x 100) / 10,606 = X
200,000 / 10,606 = X
18.85 = X
Therefore, the annual rate of return on this investment is 18.85%.
Given the following information for Blue Bell Company for last year: Net sales (all on account) $5,200,000 Cost of goods sold 2,080,000 Interest expense 240,000 Income tax expense 280,000 Net income 420,000 Income tax rate 40% Total assets: January 1 $1,800,000 December 31 2,400,000 Shareholders' equity (all common): January 1 1,500,000 December 31 1,600,000 Current assets, December 31 700,000 Quick assets, December 31 400,000 Current liabilities, December 31 300,000 Net accounts receivable: January 1 200,000 December 31 180,000 Inventory: January 1 210,000 December 31 250,000
Refer to table: Blue Bell's current ratio at December 31 was:____.
a. 2.33 times
b. 3.67 times
c. 0.43 times
d. 1.33 times
Answers
Based on the information given Blue Bell's current ratio at December 31 was:
a. 2.33 times.
Using this formula
Current ratio=Total current assets/ Total current liabilities
Where:
Total current assets=$700,000
Total current liabilities=$300,000
Let plug in the formula
Current ratio=$700,000/$300,000
Current ratio=2.33 times
Inconclusion Blue Bell's current ratio at December 31 was:
a. 2.33 times.
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A sentence that contains one independent clause and one or more dependent clauses is a
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Answer:
Complex sentence they always have one independent clause + 1 or more dependant clause
Joined by using conjunctions!
the phs regulations about financial conflict of interests require which party to disclose significant financial conflicts of interest?
Answers
The PHS regulations about financial conflict of interests require Researcher to disclose significant financial conflicts of interest
This framework describes how RAND, in order to prevent bias or the presence of bias in its research, identifies and resolves possible Financial Conflicts of Interest pertaining to research funded by the Centers for Medicare and Medicaid Services or by the Public Health Service PHS agencies of the U.S. Department of Health and Human Services.
PHS Investigators are required to disclose information in accordance with their institution's policy. All Investigators who will take part in research supported by PHS grants or cooperative agreements must adhere to the updated PHS regulations.
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how do I calculate the gain on disposal of these assets
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To calculate the gain on disposal of assets, you need to use the following formula:
Gain on disposal = Proceeds from disposal - Carrying amount of the asset (i.e. Cost of the asset - Accumulated depreciation)When an asset is sold, the company receives cash which is known as the proceeds from disposal.
The carrying amount of the asset represents the historical cost of the asset less accumulated depreciation on the asset over its useful life.
Suppose a company sells a machine for $20,000. The original cost of the machine was $30,000, and its accumulated depreciation is $10,000. Then, the gain on disposal of the machine will be:Gain on disposal = $20,000 - ($30,000 - $10,000) = $20,000 - $20,000 = $0
Therefore, in this case, there is no gain or loss on the disposal of the machine.
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T/F. handling objections and closing the sale are better served by face-to-face communication between the salesperson and the buyer as opposed to using social media.
Answers
Handling objections and final the sale are higher served with the aid of using face-to-face verbal exchange among the shop clerk and the consumer instead of the use of social media.True.
The required details about objections is mentioned in below paragraph.
An objection is a proper protest raised in courtroom docket in the course of an ordeal to disallow a witness's testimony or different proof in violation of the guidelines of proof or different procedural regulation. An objection is commonly raised after the opposing birthday celebration asks a query of the witness, however earlier than the witness can answer, or while the opposing birthday celebration is set to go into some thing into proof. The choose then makes a ruling on whether or not the objection is "sustained" or "overruled" . An lawyer can also additionally pick out to "rephrase" a query that has been objected to, as long as the choose lets in it. Lawyers have to make an objection earlier than there's a solution to the query.
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A production possibilities frontier can shift outward if
Answers
Answer:
A production possibility frontier (PPF) illustrates the combinations of output of two products that a country can supply using all of their available factor inputs in an efficient way. One way the PPF can shift outwards is if there is an increase in the active labour supply
Gerwin’s daughter Mary was seeking a position as an associate attorney with Baker, Charles & Dixon, a large metropolitan law firm. The firm, after several meetings with Mary over a two-month period, made Mary an offer of employment on January 15, 1985. Mary accepted the offer that day and immediately left for Cape Cod to celebrate without telling Gerwin or anyone else about her new job. Two days later, Gerwin sent Baker a letter in which she offered to give Baker all of her legal business (approximately $40,000 per year) if Baker would hire Mary. After Gerwin learned that Mary had already been hired by Baker, Gerwin refused to transfer her business to Baker. Baker has brought suit against Gerwin on the grounds that a valid contract exists between them. How will the case be decided?
Answers
The case filed by Gerwin against Baker will be null and void, as thee is no existence of any legal contract between the parties as such.
What is a legal contract?A contract is said to be a legal one when the party who is presented with such an offer accepts on the terms and with a condition that the offer must be for legal activities.
In case when any of the criterion mentioned above are not followed by the offeror or the offeree, then in such case, any lawsuit filed against the plaintiff will be considered as null and void.
Hence, it can be concluded that there is no legal contract between Gerwin and Baker, and thus their cases are null and void.
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Write an essay about the importance of clearances when applying for a job. need ASAP
Answers
Answer:
Background investigations are an essential aspect of the vetting process for both employees and potential employees of the US Federal, State, and Local governments and private sector companies that provide support, services and products to these government entities. These investigations are conducted to determine the suitability of the subject of the investigation to hold a security clearance for a position impacting our national security. Many of the individuals hired by the aforementioned organizations are placed in positions which require a security clearance. Based on the type of clearance, the person has access to information that is crucial to implementation of the missions of US government entities and private.
II. INSIDER THREATS
The purpose of US Federal Government background investigations is to determine if individuals are deemed acceptable for employment within the US government, and more importantly, prevent individuals of malafied intent from gaining access to a position impacting the US national security. Properly executed background investigations can greatly diminish the possibility of a potential insider threat obtaining access to classified information, which can cause the US great harm and the US government great embarrassment.
Prior to the founding of the United States of America, the insider threat has hindered the security of a nation. It is written that the outward destruction of a country results from the inward turmoil of its government. Numerous historical accounts of internal conflicts endangering the welfare of countries are present in the history books of most countries. In most instances, the conflict occurred within the governmental structure of the nation. Regarding internal threats, the US government is not immune from this imminent danger. Constantly, there are numerous threat to US government operations that are undetected. Although the US government Most recently, the breach of security of former National Security Agency (NSA) employee, Edward Snowden, and the ongoing saga of events surrounding his dubious departure from his home country have permeated the media of countries around the world. The Snowden case is “the latest.
Explanation:
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why do you have to limit your scope when planning a presentation ?
Answers
Answer:
To make every minute of your presentation work harder
Explanation:
When you plan your presentation, it`s crucial to define its scope or the amount of how deep and to which extent are you going to talk about your topic . This way ,you will make sure that you fulfilled the time given for your presentations and covered all its outlined objectives with less or greater detail.
In which area does Suzy have an absolute advantage?
Answers
In local area Suzy have an absolute advantage. Suzy is a complete consumer insights platform that combines high quality audiences, quantitative data, and qualitative data into an one connected research cloud. Set up a demo. Investigate the Platform.
Absolute advantage is a term used in economics to describe a party's better capacity for output. Suzy specifically means the capacity to create a specific commodity or service for less money than a rival. Saudi Arabia is an obvious example of a country having an absolute edge over other countries since it has access to plentiful oil reserves. Other examples include Zambia, which has some of the richest copper mines in the world.
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Isabella and Antonio are auto mechanics. Isabella takes 6 hours to replace a clutch and 4 hours to replace a set of brakes. Antonio takes 8 hours to replace a clutch and 6 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage.
Answers
Isabella has an absolute advantage in both clutch replacement and brake replacement due to her ability to complete each task in less time.
- Isabella also has a comparative advantage in both clutch replacement and brake replacement, assuming similar skills and pay rates.
How to determine the whether anyone has an absolute advantage at either task and, for each taskTo determine absolute and comparative advantages in this scenario, we need to compare the productivity of Isabella and Antonio in replacing clutches and brakes.
Let's analyze the tasks:
1. Clutch Replacement:
- Isabella takes 6 hours.
- Antonio takes 8 hours.
Based on the time taken, Isabella has an absolute advantage in clutch replacement because she can complete the task in less time than Antonio.
2. Brake Replacement:
- Isabella takes 4 hours.
- Antonio takes 6 hours.
Again, based on the time taken, Isabella has an absolute advantage in brake replacement because she can complete the task in less time than Antonio.
Similar to clutch replacement, if we assume similar skills and pay rates, Isabella would also have a comparative advantage in brake replacement due to her ability to complete the task more quickly.
Comparative advantage is based on a comparison of opportunity costs, and without specific information about the trade-offs involved, we can infer that Isabella's ability to complete both tasks more quickly gives her a comparative advantage in both.
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