--%>
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 : Effect of change on equilibrium

    Normal 0 false false

  • Q : Define the term Chapter Chapter : The

    Chapter: The reference allotted by the Secretary of State to an enacted bill, numbered in sequence in order of enactment each calendar year. The enacted bill is then termed to by this "chapter" number and the year in which it became law. For illustrat

    		•
  • Q : What is Legislative Analysts Office

    Legislative Analyst’s Office (LAO): A non-partisan organization which gives advice to the Legislature on the fiscal and policy matters. For illustration, the LAO annually publishes a full analysis of the Governor's Budget and this document becom

    		•
  • Q : What is means of correlation

    What does this mean while we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1?Correlation is calculated by the correlation coefficient, represented through t

    		•
  • Q : Assignments i want to write final

    i want to write final report about my state Texas. using the resources that i attached and the other resources to cover the outlines.

    		•
  • Q : Expected rate of return Normal 0 false

    Normal 0 false false

    		•
  • Q : Calculating the location in assessing

    Normal 0 false false

  • Q : What is Audit Audit : Usually a review

    Audit: Usually a review of financial statements or performance activity (like an agency or program) to establish conformity or compliance with the applicable laws, regulations, and/or standards. The state has three central association

    		•
  • Q : Describe the status of cyclically

    Assume the full-employment, non-inflationary level of real output is GDP3 (not GDP2). If the economy is operating at GDP2 instead of GDP3, describe the status of its cyclically adjusted budget? The status of its present fiscal polic

    		•
  • Q : Describe the effect of stock dividends

    Describe the effect of stock (not cash) dividends and stock splits onto the market price of common stock? Why do corporations state stock splits and stock dividends? Stock splits & stock dividends decrease the price per share of the common

    		•