--%>
Assignment Help - homework help

Resources flow

Along with current technology, assume a firm is generating 400 loaves of banana bread daily.  Also, suppose that the least-cost combination of resources in producing those loaves is 5 units of labour, 2 units of capital, 7 units of land, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively.  If the firm can trade these 400 units at $2 per unit, will it continue to make banana bread?  If this firm’s condition is typical for the other makers of banana bread, will resources flow to or away from this bakery good?

E

Expert

Verified

The firm will continue to generates as it is earning economic profits of $40 (Net revenue of $800 minus net cost of $760). If this firm is distinctive, more resources will flow toward banana bread as other potential firms are attracted to the economic profits.

   Related Questions in Finance Basics

  • Q : Define Budget Budget : It is a plan of

    Budget: It is a plan of operation stated in terms of financial or other resource necessities for a particular period of time.

    		•
  • Q : The official unemployment rate Normal 0

    Normal 0 false false

    		•
  • Q : Explain Urgency Statute or Legislation

    Urgency Statute or Legislation: It is a measure which includes an “urgency clause” requiring it to take effect instantly on the signing of the measure by the Governor and the filing of the signed bill with the Secretary of State. The Urgen

    		•
  • Q : Decision rule using net present value

    Describe the decision rule for accepting or rejecting proposed projects while using net present value? While using the net present value decision rule any project along with a net present value greater than or equal to zero would be acceptable.

    		•
  • Q : Supply and demand 1. Albert Jones went

    1. Albert Jones went to his local department store to purchase a pair of Levi s. He thought that the style of Levi that he wanted would sell for about $30 a pair. When he got to the store, he saw a sign which said, Levi s, all styles, $18 a pair. Albert bought three pairs of Levi s. The behavior of

    		•
  • Q : Explain the term Balance Available

    Explain the term Balance Available: In regards to a fund, it is the surplus of resources over uses. For budgeting aims, the balance accessible in a fund condition is the carry-in balance, net of any preceding year adjustments, plus revenues and transf

    		•
  • Q : Purchasing power parity of US and

    Under what condition would the U.S. dollar and the Canadian dollar said to be have achieved purchasing power parity? The U.S. dollar and the Canadian dollar would be assumed to have achieved purchasing power parity while the exchange rate reflec

    		•
  • Q : Define Spot Bill Spot Bill : It is an

    Spot Bill: It is an introduced bill which makes non-substantive modifications in a law, generally with the intent to amend the bill at a later date to comprise substantive law modifications. This procedure gives a means for circumventing the deadline

    		•
  • Q : Explain Year of Budget Year of Budget

    Year of Budget (YOB): In this the fiscal year revenues and expenses are recognized. For revenues, this is usually the fiscal year whenever revenues are earned. For expenses, this is usually the fiscal year whenever obligations, compri

    		•
  • Q : What is Indirect Costs Indirect Costs :

    Indirect Costs: The costs which by their nature can’t be readily related with a particular organization unit or program. Similar to general administrative expenses, indirect costs are dispersed to the organizational unit(s) or programs that bene

    		•