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CPA-08299: Managers of the Doggie Food Co. want to add a bonus component to their compensation plan. They are trying to decide between return on investment (ROI) and residual income (RI) as the performance measure they will use. If Doggie adopts the RI performance measure, the relevant required rate of return would be 18%. One segment of Doggie is the Good Treats division, where the manager has invested in new equipment. The operating results from this equipment are as follows:
Revenues $ 80,000
Cost of goods sold 45,000
General and administrative expenses 15,000
Assuming that there are no income taxes, what would be the ROI and RI for this equipment that has an average value of $100,000?
ROI RI
Answer:
ROI = 20% and RI = $2000
Explanation:
Return On Investment(ROI) = Profit before Interest & Tax/Average Investment
Profit before Interest & Tax (PBIT) = Revenue -cost of goods sold- General & Adm expenses
PBIT= $ 80,000 - $45,000 -$15,000
= $20,000
ROI = ($20,000/100,000) * 100% = 20%
Residual Income = PBIT - (Average Investment* Required Rate of Return)
=$20,000- (18%* 100,000)
=$20,000- $18,000
= $2000
A graphical representation of all organizational jobs along with the numbers of employees currently occupying those jobs and future employment requirements is called:
a. a staffing table.
b. an organization chart.
c. a skills inventory.
d. career planning.
Answer:
a. a staffing table.
Explanation:
A staffing table -
It refers to the pictorial or the graphical arrangement of the jobs in a firm , where the number of current employees working and their positions and the number of any future vacancy all are represented , is referred to as a staffing table.
It enables the people to get proper idea and information of the organisation or the company .
Hence , from the information of the question,
The correct option is a. a staffing table.
A organization chart is the graphical representation of all organizational jobs along with the numbers of employees currently occupying those jobs.
The organizational chart refers to a diagram representation which shows the company's job roles, responsibilities and relationships.
The organizational chart shows the graphical arrangement of the jobs in a firm, number of current employees and their positions.
The organizational chart enables the staffs to have a proper idea and information of the organisation.
In conclusion, the Option A. is correct.
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Liability of foreignness is the inherent disadvantage experienced by foreign firms in host countries because of their non-native status.True / False.
Answer:
True
Explanation:
It is an inherent disadvantage that foreign firms experience in the host country because of non-native status. It is considered as liability of foreignness as foreign companies are well versed with the cultural difference, tax policies and people´s response to the product and services produced, therefore foreign companies need to invest resources to learn the technique of business in different country.
To have competitive advantage in the foreign market, the companies should have organized resources, cost to compete and capabilities to offset the liability of foreignness.
________ assumed that the psychological forces shaping people's behavior are largely unconscious, and that a person cannot fully understand his or her own motivations.A) Abraham MaslowB) Frederick HerzbergC) Sigmund FreudD) John CacioppoE) Karl Marx
Answer:
C) Sigmund Freud
Explanation:
Sigmund Freud found that the psychological forces developing people's performance are largely unaware as well as that a personality cannot fully realize his or her personal motivations. Basically psychological forces are a collection of emotions, ideas, as well as behavioral improvements driving to development. And as we should know that "Sigmund Freud" was a man who born in Austria and was a neurologist and the originator of psycho-analysis. That is a clinical approach for operating psychopathology through conversational dialogues.
Sigmund Freud is the one who assumed that psychological forces shaping behavior are largely unconscious and beyond personal awareness, contributing significantly to the development of psychoanalytic theory.
The individual who assumed that the psychological forces shaping people's behavior are largely unconscious, and that a person cannot fully understand his or her own motivations was Sigmund Freud. Freud is renowned for developing the psychoanalytic theory, which emphasizes the predominance of the unconscious mind in influencing behavior and personality. He introduced several key concepts, including the id, ego, and superego, as well as the defense mechanisms used to cope with anxiety and maintain a positive self-image. His theories propose that behavior, experience, and cognition are largely shaped by unconscious drives and events in early childhood, which determine an individual's personality and motivations.
BigFoot is a new online shoe retailer that just hit the market. If a customer chooses to shop at BigFoot rather than Zappos, this is an example of which of Porter's Five Forces?
Answer:
Threat of new entrants.
Explanation:
Porters Five Forces includes;
The bargaining power of customers,The threat of substitute products or services and others,The bargaining power of suppliers,Competitive rivalry and finally,Threat of new entrants.However, it is the threat of new entrants scenario we find in Bigfoot's case because Zappos is experiencing reduced market share because of the new entrant (Bigfoot).
Ceteris paribus, when the price of tuition increases, fewer people will choose to go to college. What do we mean by ceteris paribus in this statement?
a. We also assume fewer students are entering high-paying college majors
b. We know that college graduates are also currently earning lower wages
c. Fewer students attend college because classes are getting more difficult
d. All of the above
e. None of the above
Answer:
Option "D" is most suitable answer for the question.
Explanation:
Ceteris paribus involves keeping all other variables stable. So in our situation, because we recognize that a rise in tuition fees could result in fewer people deciding to join college, we believe that other causes that we don't realize might affect fewer people choosing to join university will stay.
Therefore Option "D" is the most suitable option for the above type of problem.
________ planning is a managerial decision process that matches an organization’s resources and capabilities to its market opportunities for long-term growth and survival.
Answer: Strategic Planning
Explanation:
The strategic planning is one of the type of business strategy in which the various types of management activities are used for strengthening the operations, focuses on the company resources and the energy.
The main objective of the strategic planning is that it helps in the decision making process and also control the company mechanisms by implementing various types of plans and the strategy for achieving the desired goals of an organization.
According to the given question, the strategic planning is one of the type of long term growth planning as it helps in matching the various types of organization resources and the opportunities according to the market evaluation or progress.
Therefore, Strategic planning is the correct answer.
A Bank loaned out $12,000, part of it at the rate of 8% per year and the rest at the the rate of 18% per year. If the interest recieved totaled $1000, how much was loaned at 8%?
Answer:
amount loaned at 8% interest is $11.60
Explanation:
given data
loan = $12,000
rate = 8% per year = 0.08
other rate = 18% per year = 0.18
interest receive = $1000
solution
we first consider here amount for loaned at 8% = x
so here amount for loaned at 18% will be = $12,000 - x
so we can say interest received equation will be here as
$1,000 = (0.08)x + (0.18)($12,000 - x)
solve it we get
x = $11.600
so amount loaned at 8% interest is $11.60
Scarcity exists because: individuals cannot solve the three central coordination problems. governments cannot solve the three central coordination problems. the supply of goods is always less than the demand. new wants continue to develop and willingness to meet them is limited.
Answer:
Scarcity exists because new wants continue to develop and willingness to meet them is limited.
Explanation:
Scarcity exists because of the mismatch between wants and resources. The wants of the human beings are unlimited and also continue to develop more day by day. Resources to satisfy the unlimited wants on the other hand, are limited or scarce. That's why the willingness to meet new wants and already existing is limited.
Scarcity is a fundamental concept in economics that refers to the limitation of resources in the face of seemingly unlimited human wants and needs. It is primarily influenced by the fact that the supply of goods never seems to meet demand and is further magnified by the continual development of new human wants and desires.
Explanation:Scarcity, in economics, refers to the basic economic problem of having seemingly unlimited human wants and needs in a world with limited resources.
Because these resources are limited, the concept of scarcity exists. The statement 'the supply of goods is always less than the demand' is closely tied to the concept of scarcity.
Scarcity does not necessarily concern individuals' or governments' inability to solve central coordination problems but rather deals with the inherent limit in the availability of resources in relation to wants and needs.
It is also influenced by human's continual development of new wants and the sometimes limited willingness or ability to meet these wants.
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"Gathering information from potential customers in an effort to determine their preferences is an example of using statistics in the field of ________."
Answer:
Marketing Research
Explanation:
Marketing Research
This is the process of investigating collecting , analyzing and interpreting informatiom about a market of a particular product or service to be rendered for sale in the market , and about the past, present and potential customers for the product or service; research into the characteristics, their spending habits, location and needs of your business's target market, the industry as a whole, and the competitors you face
Accurate information about your customers needs will ensure the sales of your product and service.
Ryan is trying to dispel the myth that the role of salespeople is to "sell refrigerators to Eskimos." He tells his salespeople that their organization needs to be a customer-centric organization that helps customers:
A. by identifying problems.
B. by finding information about potential solutions.
C. by providing after-sale service.
D. by making the customer the center of their efforts.
E. all of the above.
Answer:
E. All of the Above
Explanation:
A customer centric organisation represents an organisation that puts the customer of its products as well as their experience with the product at the centre of its activities. Customer satisfaction both before and after sales of products is core to such organisations.
Since, Ryan is trying to promote a customer centric organisation which emphasizes satisfaction before and after sales, then all the options listed are important.
Salespeople should be able to identify customer problems while trying to purchase and during use, salespeople should not only identify these problems but must also find and suggest potential solutions to them.
After-sale service is core because customer experience with the product of such organsation is also as important as their buying experience.
Finally, since all these activities are customer centered, it is good to assume that such organisations and their salespeople make their customers the center of their efforts.
Final answer:
Ryan is advocating for a shift towards a customer-centric organization, which includes identifying customer problems, providing solutions, after-sale service, and focusing on the customer's needs as a whole. This customer-centric strategy contributes to establishing stronger customer relationships and better business outcomes.
Explanation:
Ryan is illustrating a paradigm shift in sales from a product-centric approach to a customer-centric organization. This shift emphasizes the importance of salespeople acting not just as vendors, but as consultants who assist customers by identifying problems, finding information about potential solutions, providing after-sale service, and making the customer the centre of their efforts, which is summarised in option E: all of the above.
These strategies are integral to building a sustainable business as they foster better customer relationships, yield insights into their needs and expectations, and ultimately contribute to a positive, productive work environment.
By reframing the role of salespeople in this way, it acknowledges that the initial sale is just one component of a longer relationship with the customer that includes service, support, and ongoing engagement. This approach also aligns with the philosophy described by Kate Cannon, who identified that understanding employees' and clients' emotions plays a crucial role in business outcomes. With this mindset, salespeople and organizations can dispel outdated myths of aggressive selling and instead focus on a customer-centric strategy that leads to mutual satisfaction and success.
______ argued that the major activities of management and leadership are played out differently; but both are essential to an organization.
Answer:
Kotter
Explanation:
According to Kotter, leadership and management are two different aspects but however they are complementary systems of action in organization.
An inferior gooda) has a negative income elasticity b) is one where the demand curve shifts to the left when income goes upc) exists only in theoryd) is low-quality goode) both a and b are true
Answer: Has a negative income elasticity.
Explanation:
An inferior good demand would drop with an increase in income of the consumers of it, therefore inferior good normally experience negative income elasticity of demand. This drop occurs because, as consumers earn more they would now love to buy original goods.
The process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed is the definition of __________. A. FeedbackB. InformationC.Competitive intelligenceD. Data
Answer: (C) Competitive intelligence
Explanation:
The competitive intelligence is one of the process of analyzing the various types of information that helps in learned abut the market, consumers and the competitors.
The main objective of the competitive intelligence is that it helps in support the various types of strategic decisions in an organization.
According to the given question, the competitive intelligence is helps in gathering the data for improving the ability of an organization in this competitive environment.
Therefore, Option (C) is correct answer.
only deposits of a rare and sought-after mineral known as Yuksporite are found in ussia. Since no other nation has deposits of Yuksporite, Russia has an in this mineral. A) diversified benefit C) relative internal benefit B) protected advantage D) absolute advantage
Answer:
D. Absolute Advantage
Explanation:
Absolute advantage represents an economics principle referring to the capability of a firm or a country or even an individual to manufacture or produce a larger quantity of a product or offer a greater quantity of a service than its competitors especially with the same amount of resource which in in reference to international trade is labour.
The absolute advantage for Russia in the question is that it has the only deposits of Yuksporite and using the same amount of labour input other countries would have used, Russia has the absolute advantage as the only manufacturer of goods that would come out of Yuksporite.
Answer:
D) absolute advantage
Explanation:
Absolute advantage is the ability of a country to make available a particular good or service much affordably than any other nation.
In application to the given scenario, since no other nation has deposits of Yuksporite, Russia has an absolute advantage in this mineral since no other nation will be able to provide Yuksporite cheaper, because they must have bought from Russia before they are able to supply to any other country and in that case they will sell at a margin
"Dividing the market into segments according to when buyers get the idea to buy, actually make their purchase, or use the purchased item, is called ________ segmentation."
Answer: The correct answer is Occassion Segmentation
Explanation: Occasion segmentation refers to a process of dividing the market into groups on the basis of the different occasions when the buyers plan to buy the product or actually buy the product or use the product.
Certain products are regarded as apt for a particular time or occasion of which the reason behind occasion segmentation is to project the ‘purpose of purchase’ so as to improve the sales of a particular product or service.
Behavioral segmentation is a strategy used by companies to divide the market based on consumer purchasing behavior. It enables firms to create specific marketing strategies to target consumer segments at different stages of their purchasing timeline, potentially increasing their market advantage.
Explanation:Dividing the market into segments according to when buyers get the idea to buy, actually make their purchase, or use the purchased item, is called behavioral segmentation. This concept is a critical aspect of a company's overall marketing strategy. Behavioral segmentation allows firms to understand the various needs and drivers of consumers based on their purchasing behavior. It includes factors such as usage rate, brand loyalty, and the benefits sought by the customer. Companies using this approach can tailor their market offers and communications to match the unique behavioral patterns of different consumer segments.
For example, a company may identify a segment of consumers who tend to make purchases during festive seasons and then develop specific marketing strategies to target this segment. By understanding consumer demand and focusing marketing efforts during peak times of purchase, a firm may successfully increase its advantage over competitors.
Understanding the consumer's decision-making process, such as the timing of their purchases and consumption ('intertemporal decision making'), enhances the company's ability to adopt a focus strategy. This strategy concentrates on serving a specific market segment either more efficiently or with tailored product variations that meet the segment's needs, in line with Porter's concepts of cost leadership or differentiation strategies.
System ________ refers to the process of changing the business activity from an old information system to a new system.
Answer: Conversion
Explanation:
The system conversion is one of the type of business conversion strategy in which the various types of business activities are replace some old information from the new system.
The main objective of the system conversion is to updated the old information system from the new one according to the customer requirement. It basically providing the good structured approach for improving the management and also the communication.
Therefore, System conversion is the correct answer.
Which behavior demonstrates courtesy toward others in the workplace?
A.working long hours to complete a work assignment
B.solving complex technical problems to get a project schedule back on track
C.asking a coworker about his or her annual review results
D.consulting with a coworker before intervening in one of his or her projects
The behavior which demonstrates courtesy toward others in the workplace is, consulting with a coworker before intervening in one of his or her projects.
Answer: Option D.
Explanation:
Courtesy is being polite and kind. It means showing politeness in ones behavior. So the most appropriate behavior of courtesy in workplace is mostly certainly consulting before involving in his/her project.
Asking before intervening is important so as to avoid any conflict between the workers and it is also a good gesture towards other co workers. This thus demonstrates the courtesy towards others. Consulting shows respectfulness towards the other person, thus resulting in courtesy behavior.
Aaron says to Mitt, "In consideration of you being such a swell guy, I’m going to give you $100." Is there consideration sufficient to enforce this promise?
Answer:
Yes
Explanation:
Consideration is the price of a promise to do something or abstain from doing something. Aaron's promise to Mitt to pay $100 will be treated as past consideration if it was given at the desire of Aaron. So there is sufficient consideration to enforce this promise.
If a worksite includes more than one set of management and workers, who should have access to the information, training, and controls needed to avoid workplace accidents?
Select the best option.
One manager per worksite
Every worker and manager
One manager per set of management within the worksite
Every worker and manager per set of management within the worksite
Everyone in the worksite including all workers and managers, regardless of the number of sets of management and workers, should have access to safety information, training, and control to avoid workplace accidents. This consensus enhances an effective response to risks and accidents. Option 2 is correct.
Explanation:In matters of safety within a worksite,(option 2) every worker and manager should have access to vital information, training, and control needed to avoid workplace accidents regardless of the number of sets of management and workers within the worksite. This is because everyone in the workplace contributes to the overall safety. For example, a worker who is well-aware of the risks and controls in place can react appropriately during accidents and even prevent them from happening.
Meanwhile, managers who understand these risks can plan accordingly and ensure that these preventative measures are well-implemented and efficiently communicated throughout the staff. On a broader context, this principle is embedded in Occupational Safety and Health Administration (OSHA) regulations.
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One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls.
Answer:
scarcity is the fact that people must make choices as they try to attain their goals.
Explanation:
Scarcity is a commodity's lack of availability, and may be in consumer or commons production. Scarcity often includes a lack of resources for buying goods from a person. There is plenty to the reverse of lack. Scarcity provides limited resources than is required to fulfill human needs and desires.so, we say that scarcity leads to dissatisfaction.
therefore the right answer is Scarcity.
On January 1, a company made a sale of $87,500, on credit. If the credit terms were 2/10, n/30, what would be the amount of the sales discount be if the payment is received on January 9?
a.$8,750
b.$1750
c.$10,000
d.$26,250
Answer:
b. $1750
Explanation:
Provided that
Sale of the company = $87,500
Credit terms = 2% if payment is received within 10 days and the prescribed time limit is 30 days
The amount of the sales discount would be
= Sale of the company × discount percentage
= $87,500 × 2%
= $1,750
We simply multiplied the sale of the company with the discount percentage so that the sales discount could come
Assume you have an AMEX card which pays a 2% cash rebate on all purchases, and a VISA card which pays a 1% cash rebate on all purchases. Gas stations A and B both show a price of $2.00 per gallon, but station A does NOT accept AMEX cards while station B does.How much more expensive is the gas at station A assuming you use your VISA card instead of the AMEX card?
Answer:
The gas at station A is $0.02 per gallon more expensive
Explanation:
Data provided in the question:
Cash rebate provided by the AMEX card = 2%
Cash rebate provided by the VISA card = 1%
Price of the gas = $2.00 per gallon
Now,
Amount of rebate provided by the AMEX card per gallon = 2% of $2.00
= 0.02 × 2.00
= $0.04
Amount of rebate provided by the VISA card per gallon = 1% of $2.00
= 0.01 × 2.00
= $0.02
Since station A does not accept AMEX card
Therefore, VISA card will be used at station A
Thus,
Rebate at station A = $0.02
And rebate at station B = $0.04
Difference in rebate = $0.04 - $0.02
= $0.02
Hence,
The gas at station A is $0.02 per gallon more expensive
Using the VISA card at gas station A, which does not accept AMEX cards, makes the gas $0.02 more expensive per gallon than using the AMEX card at station B that does.
Explanation:The subject of the question is determining the cost difference of gasoline when using two credit cards with different cash rebate percentages. You have an AMEX card offering 2% cash rebate and a VISA card offering 1% cash rebate. Since both gas stations A and B list the price at $2.00 per gallon, we must calculate the effective price after the rebate is applied when using each card.
With the AMEX card at station B, the rebate would be $2.00 × 0.02 = $0.04 per gallon, making the effective price $2.00 - $0.04 = $1.96 per gallon. Using the VISA card at station A, the rebate is $2.00 × 0.01 = $0.02 per gallon, making the effective price $2.00 - $0.02 = $1.98 per gallon. Therefore, the gas at station A is $0.02 more expensive per gallon when using the VISA card instead of the AMEX card.
Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot:_______.
a. nothing.b. compensatory damages.c. consequential damages.d. nominal damages.
Answer:
D. Nominal Damages
Explanation:
Where there is a breach of contract, especially as recored between Dry Gulch Farms and Elliot (who was hired to repair the irrigation system on a certain date for $2500), the law permits the wronged party who becomes a plaintiff/ Claimant to recover damages from the party who breached the contract.
Damages are monetary in nature and are usually paid by the claimant for the breach of contract. The type of damages to claim however, depend on the nature of the breach of contract.
However, in a situation where the breach of contract did not lead to an actual financial loss, then the claimant can only clain nominal damages. In this question, since Fernando was subsequently hired to do the job for $2000 less than the $2500 agreed with Elliot, then there are no financial losses and Dry Gulch farms can claim nominal damages
Answer:
Nominal damages
Explanation:
Nominal Damages
Nominal damages is a damage award, normally issued by a court when a technical loss has occurred, but where there was no actual financial loss as a result of that wrong.
Elliot does not show up as agreed to repair Dry Gulch Farms's irrigation system so they may recover nominal damages from Elliot even though there was no financial loss
Silk-skin Cosmetics is advertising its newest line of eye makeup. Made from all-natural ingredients, the products are hypoallergenic. Silk-skin is selling the products in specially designed tubes that make it easier to apply to the skin. Which of the following is the core product value for Silk-skin's line of eye makeup?
Complete question:
A) the natural ingredients
B) the Silkskin brand
C) the products' revolutionary packaging
D) the hypoallergenic properties of the products
E) the possibility of having beautiful eyes
Answer:
The possibility of having beautiful eyes is the core product value for Silk-skin's line of eye makeup.
Option E is correct
Explanation:
A solution to a genuine problem that is important enough to make people pay for a commodity is the core product benefit.
First, whenever the customer interacts with the company at an A-Ha moment, the core product interest is remembered.
For example, the key benefit of a vehicle, the ability to move around at a fast pace, is the key commodity of a car.
In this case, the essential product value of eye make-up for silk-skin cosmetics is the possibility of beautiful eyes.
In strategic planning, managers consider the organization as a total unit and ask themselves what must be done in the long term, which is usually _________
Answer:
3 to 5 years
Explanation:
Strategic planning is the management activity of the business or the firm which is used in order to set the priorities, resources, focus energy, strengthen the operations, that ensure that the employees and the stakeholders are working toward a common motive or a goal.
Under this planning, managers considered the firm as a aggregate unit and ask themselves that what must be done for the long term, which is generally, three to five years, because the long term involves the long period or year of time that seeks the long term solutions.
Florida schools offered cash bonuses to students who scored high on the state's standardized exams. The cash bonuses are an example of this economic principle:
a.People usually take advantage of opportunities to make themselves better off.b.There are gains from trade.c.The real cost of something is what you must give up to get it.d.Resources are scarce.
The cash bonuses are an example of this economic principle of People usually take advantage of opportunities to make themselves better off.
Explanation:
A cash bonus applies to a large amount of money offered to an individual for good performance either periodically or daily. An employee, division or the whole organisation, depending upon the extent at which performance goals were achieved may earn a cash bonus for higher than expected achievements.
Let's take the example of Company ABC. The company has a 15-person sales team. Each team member has to add 10 accounts each. At the end of every year, the company can give every employee a cash bonus of $1,500 in order to meet their objectives.
A owner agrees to lease a property to be used as a casino; state laws prohibit gambling. This contract would be legally defined as:1. void.
2. voidable.
3. valid.
4. unenforceable.
Answer:
It is void (1)
Explanation:
A void contract is a type of contract that cannot be enforced by law by either of the party. A void agreement is void ab initio, i e from the beginning.
A good example of void contract is agreement to carry out an illegal act.The contracting parties do not have the power to make a void contract enforceable.
A contract can also be void due to the impossibility of its performance or prerequisites of a valid contract is/are absent.
A company can differentiate itself from competitors using symbols such as McDonald's golden arches, Twitter's bird, and the Nike swoosh. Which type of differentiation is this?
Answer:
Image differentiation
Explanation:
Image differentiation, involves using images and company logo to differentiate itself from other brand competitor.
The "Hate Thousand Miles" campaign seeks consumers' attention through the unusual approach of acknowledging and embracing the hate some people feel for Spirit and other airlines. This unique tactic is an example of which stage of the 4E framework for social media?
a. experience
b. education
c. engagement
d. excitement
e. exploration
Answer: (D) Excitement
Explanation:
The excitement is one of the first stage of the 4E framework in which the various types of campaign of the social media try to gain interest and also the attention of the consumers.
The excitement stage basically excite the customer for the different types of offers by using the social media and the various types of mobile media for establishing a good imprint about the products in minds of customer.
According to the given question, the excitement is one of the example of unique tactic stage in the 4E framework.
Therefore, Option (D) is correct answer.
Consider the following combinations of guns and butter that can be produced 0 guns, 20,000 units of butter, 5,000 guns, 15,000 units of butter, 10,000 guns, 10,000 units of butter, 15,000 guns, 5,000 units of butter 20,000 guns, 0 units of butter. The PPF between guns and butter is a a downward-sloping bowed-out curve b a downward-sloping straight line c an upward-sloping straight line d it is impossible to answer this question without knowing which good would be plotted on the vertical axis
Answer:
B. Downward sloping straight line.
Explanation:
Production Possibility Frontier is graphical representation of two goods that an economy can produce , given resources & technology .
Production Possibility Frontier is downward sloping because of negative relationship between two goods , one good can be increased by reducing other - given same resources & technology.
The slope of PPF depends on Marginal Opportunity Cost i.e amount of a good sacrifised to gain an additional of the other one i.e Δgood sacrifised / Δgood gained . If MOC is constant : PPF is a straight line (like in this case) ; If MOC is increasing (general case - due to resource shift from efficient to inefficient good production) : PPF is concave / outward bowed curve ; If MOC is decreasing : PPF is convex .
As per given schedule :
Guns Butter MOC (Δgood sacrifised / Δgood gained)
0 20000 _
5000 15000 5000 / 5000 = 1
10000 10000 5000 / 5000 = 1
15000 5000 5000 / 5000 = 1
2000 0 5000 / 5000 = 1
As it can be seen : Guns are increasing & Butter are falling , so these have inverse relationship & PPF is downward sloping .The ratio of butter sacrifised to gain guns is constant, so MOC is constant & PPF is straight line.