Advantages of marginal costing (Relative to the absorption costing) Preparation of routine operating statements using absorption costing is considered less informative for the following reasons: 1. Profit per unit is a misleading figure: in the example above the operating margin of Rs2 per unit arises because fixed overhead per unit is based on output of 5‚000 units. If another basis were used margin per unit would differ even though fixed overhead was the same amount in total 2. Build-up or run
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Resources‚ Comparative Advantage and Income Distribution A Written Report Requirement for ECONOMICS 141: International Economics Professor Burt G. Galang 30 August 2014 Resources‚ Comparative Advantage and Income Distribution The previous discussion has shown how international trade could be helpful to both countries that are engaged in it as shown in the Ricardian Model. Now that we have seen the positive effects of trade‚ it is time to take a look at how
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Theory 2nd STAGE/ 2nd THEORY Absolute Advantage Smith attacked mercantilist assumption that trade is a zero-sum game by argued that countries differ in their ability to produce goods efficiently. Thus‚ a country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it. Therefore‚ countries should specialize in the production of goods for which they have an absolute advantage & then trade these for goods produced by other
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Essay by George Kotselopoulos Why do countries trade with each other? Show‚ using examples‚ why this may be to do with the principle of comparative advantage. International trade is the barter of goods and services between nations. The reason of such exchanges is because each country has access to different forms of natural‚ human‚ and capital resources; as well as a different way to use them for production of goods and services. Therefore countries are not always able to supply the goods
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Growing Economies‚ Rising Problems Global groups struggle with fast rise of poor nations‚ putting conflict on the horizon Uri Dadush‚ William Shaw YaleGlobal‚ 23 June 2011 WASHINGTON: The rise of developing countries is transforming the global economy. Whereas for the bulk of the world’s population economic stagnation has been the rule over millennia‚ today’s economic growth is unprecedented. More countries – and people – are achieving rapid income growth than ever before‚ and developing countries
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"Competitive vs Comparative Advantage"] Now I wanted to briefly address the relationship between comparative advantage as we found it in the Ricardo story versus the competitive advantage which is at the business level. In the first year you had International Business‚ in this textbook there is often the reference being made between the relationship between international economics and business competitiveness‚ but often you also have a sort of confusing usage of competitive and comparative advantage as they
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I. The comparative advantages of rice export industry of Vietnam. As we know‚ now Vietnam is standing in top 3 in the ranking board of the 10 biggest rice exporters. The question is how Vietnam can reach this position? Because we have many comparative advantages in rice export field. 1. The geographical position of Vietnam. Vietnam has a long maritime adjacent to East sea – one of the most important sea transports in the world. Every year‚ thousands of transport ship move from North Pacific ocean
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theory of comparative advantages‚ does international trade always benefit the lower income group in a poor country? Who do they trade with? Who are the poor countries? Define by using GDP per capita (usual gauge). Thus China can be considered as a poor country. Among the poorer group‚ they are richly endowed in labor. Poor countries tend to have more workers than machines. They’re comparative advantage lies in their labor industries. According to theory of comparative advantage‚ the workers
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Advantages and dis advantages of credit cards More and more people are using credit cards now a days .As the number of people using credits cards rises‚ also the number of people with bad credit rises .Instead of carrying a wad of cash in your wallet it’s not really hard to think about carrying something small and convenient .How about a small piece of plastic that’s about four inches long. More people are using plastic currency more than paper. But before you think about of just getting just any
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The Relativity of Comparative Advantage of Low Labor Cost and the Absoluteness of Technological Advantages Introduction: Under the atmosphere of globalization of economy‚ the opportunities for the manufacture enterprises of fewer technologies located in less developed countries and areas to survive and develop have emerged. The opportunities are not kindly offered by the competitive world leading producers but created by “Comparative Advantages of Low Labor Cost”. Analysis of
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