Answer:
e. $638
Explanation:
payment to be made as per forward contract (IN $)
= 39960/ 1.682
= $23757.43
now the actual rate after 90 days is 1.638
payment at 1.638 rate = 39960/ 1.638
= $24395.6
loss by hedging = $24395.6 - $23757.43
= $638.17
Therefore, The U.S. firm have saved or lost $638 in U.S. dollars by hedging its exchange rate exposure.
Answer:
A. supply chain
Explanation:
The supply chain is the entire system that a manufacturer uses to deliver finished products to the intended consumers. The supply chains start from sourcing materials to the processing and distribution of finished goods to final consumers. The supply chain managers manage the supply chain process.
The supply chain system consists of the manufacturer and some independent entities such as distributors, wholesalers, warehousing service providers, transporters, and retailers.
Answer:
E. do not always behave rationally because they are overly optimistic about their future behavior.
Explanation:
Behavioral economics is the study of irrational economic decisions from people's behavior.
Behavioral economics includes the people's emotional framework to make choices beyond the rational choice theory, which states that a rational person is not moved by emotions and social factors to choose the option that maximizes their satisfaction.
To be overly optimistic about your future behavior is biased from social factors and it is a behavior that could be understood from the human emotional framework.
Answer:
5 tons of salt for 1 ton of pepper
10 tons of salt for 1 ton of pepper
Explanation:
Alphaland's opportunity cost of producing one ton of pepper = 80 ÷ 5
= 16 tons of salt
Betaton's opportunity cost of producing one ton of pepper = 3 ÷ 1
= 3 tons of salt
Alphaland's opportunity cost of producing one ton of salt = 5 ÷ 80
= 0.0625 tons of pepper
Betaton's opportunity cost of producing one ton of salt = 1 ÷ 3
= 0.3333 tons of pepper
Therefore, Betaton has a comparative advantage in producing pepper because it has the lower opportunity cost of producing pepper as compared to Alphaland. On the other hand, Alphaland has a comparative advantage in producing salt because it has the lower opportunity cost of producing salt as compared to Betaton.
Hence, Betaton is specialized in the production of pepper and Alphaland is specialized in the production of salt.
Trade is beneficial for both the nations when Alphaland buys pepper at a price lower than the 16 tons of salt and Betaton sells pepper at a price greater than 3 tons of salt.
Trade ratios:
5 tons of salt for 1 ton of pepper
10 tons of salt for 1 ton of pepper
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