Econ assignment 2 Example | Topics and Well Written Essays - 250 words

Econ 2 - Assignment Example Sweden has comparative advantage in Volvos while Norway has a comparative advantage in fish. The free trade relative price is different from the autarkic relative price and thus both countries gain. Both countries specialize in their comparative goods and thus they gain. The minimum expenditure that is needed to attain the autarkic level of utility at autarkic prices is lower than the minimum expenditure required in achieving the free trade level of utility at autarkic prices. The external economies of scale are important in production of semiconductors and the industries are concentrated in certain locations. Thus if a semiconductor industry is established in a certain location, the export of semiconductors by the country will not be due to comparative advantage but the economies of scale. It is true, and Scotch only comes from Scotland since it requires skilled distillers who are mostly found in the region. The region also features favorable climatic and soil conditions for the grains used in the production of scotch. The production subsidy creates an imaginary shift of the supply curve to the right since producers are willing to supply larger quantities at every price due to the subsidy. The rightward shift crosses the $10 line at the quantity, 170 and producers gain in the area, which is given by (120x5) + (50x5/2)= 725, the government will lose an amount = (170x5) = 850 and the social benefit = (10x50) = 500 Goldberg, Linda S., Michael W. Klein, Jay C. Shambaugh, and Paul R. Krugman. Study guide to accompany International economics, theory and policy, sixth edition, Paul R. Krugman, Maurice Obstfeld. Boston, Mass.: Addison Wesley, 2003. Web. 8 July 2014

Goodness of the Service Level and Current Structure Assignment - 22

Goodness of the Service Level and Current Structure - Assignment Example However, equation 2 and 4 only hold if y= 0, for non-negative values of x andy. Consequently, x= 4300 is the optimal number of vaccine doses that the facility can purchase for optimality. From the confidence interval formula for normal distribution, Z=(mean-Â µ)/(standard error) And mean-Â µ = zero and this means that Z is not defined. As Z approaches infinity, however, the probability of failure approaches zero. Therefore, at 4300 doses, the facility has a zero percent probability of failure. The optimal number of vaccines and chance of running out of vaccines Optimal profitability occurs when total cost equals total expenditure for generating the cost. Assuming that an organization purchases z doses of the vaccine and sells x doses and returns y doses to the Centers for Disease Control and Prevention, the following are computations for the optimal number of vaccine doses and the chance of scarcity. Cost of vaccine= 4z= 4(x+y) Revenue= 15x+ y, based on $ 15 sales price and $ 1 buy back price. Reduction to lower levels such as $ 7 per dose would motivate people into and increase a total number of used vaccines. A reasonable profit level would, therefore, be possible, and even higher levels attained due to a higher number of unit sales. Such a reduction in price would also promote quality of health by preventing flue (Thompson 1). A hold on the buy-back policy is likely to reduce facilities’ stock level and therefore limit the availability of vaccines. In addition, unused vaccines would lead to greater losses and prompt facilities to charge higher prices on sales. Consequently, holding the buy-back is likely to reduce demand for vaccines and increase the burden of the flue.