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                 MINI ASSIGNMENT



Table of Contents

Question 1. 3

Question 2. 4

Question 3: 5

Question 4. 6

Reference. 8




Question 1

  1. As per the utility function U = P 5

In this P is recognized to be price of pie. The main benefit in spending $10 on pie is $10.

The price will be equal to utility because the consumable basically be motivated in adjusting the purchase so that the price of every good will be considered equal to the marginal utility.

  1. The net benefit will be recognized to be negative If benefits is recognized to less than the particular cost of $10 (Webpage, 2022). If the benefits are equal to $10 then the net benefit will be zero. If the benefit result in exceeding the cost of $10 then the net benefit will be considered positive.
  2. Net worth of Yennifer is recognized to be less than dollar 10 then she will basically we not able in purchasing the pie. This means that she will accept the free pie as the cost will be equal to zero and the net benefit will be considered positive.
  3. If it has been assumed that there is dollar 7 in pocket of Yennefer then she will purchase by en afternoon. However, the amount of dollar 10 is already been spent by Geralt in the origin we will not be able in purchasing the in afternoon.


Question 2


ParticularsIf project is abandonedIf project is completed
Cost already incurred200200
Additional cost0170
Total cost200370
Profit/ loss (B- A)-20010

If the project has been abandoned, then it will result in leading to the dead loss of 200 million in which the project will be completed and it can result in profit of 10 million. So it has been determined that this project will be continued.

ParticularsIf project is abandonedIf project is completed
Cost already incurred200200
Additional cost0300
Total cost200500
Profit/ loss (B- A)-200-120

If the project has been abandoned, then it will result in the Dead loss of 200 million and profit of 120 million. By looking into the alternative options available and if there are no options then the company should continue with the project and completed (Webpage, 2022).

ParticularsIf project is abandonedIf project is completed
Cost already incurred500500
Additional cost0100
Total cost500600
Profit/ loss (B- A)-500-220

In March 2020 the organization has basically spent 500 million on the project and if the project is particularly abandoned it will result in loss. Therefore, it can be stated if the completion of the project is done than it can reserved in recovering to 80 million of loss and so it will be advisable in completing the project.


Question 3:

S No.Total revenueTotal costMarginal revenueMarginal cost


The profit is maximum when MR = MC and MC is rising.

When the production level result in reaching the point that production cost of producing the additional unit result is exceeding the revenue from the particular output unit then production of the additional unit of output it will result in reducing profit (Webpage, 2022). At this time form will not produce any profit. As per the above calculation it has been determined that the above firms are required in making the 2 fishing trips for gaining the maximum profit.


Question 4

  1. Aluminum production: Australia is having the absolute advantage in comparison to Malaysia as it can result in producing more amount of aluminum in comparison with Malaysia.
  2. Fertilizer production: Australia is considered in having the absolute advantage for production of fertilizers over Malaysia as it can help in producing more amount of fertilizers in comparison to the other country.
  3. Opportunity cost of Australia: 40/80 =0.5
  4. Opportunity cost of Malaysia: 16/20=0.8

The opportunity cost can be considered as the amount that is forgone and that would have been derived from the option that has not been chosen. According to the calculation it has been determined that the opportunity cost for fertilizer production in Australia is 0.5 and opportunity cost for production of fertilizer in Malaysia is 0.8. According to this it has been stated that Australia is having the comparative advantage in comparison to Malasiya.

  1. Opportunity cost of Australia: 80/40 =2
  2. Opportunity cost of Malaysia: 20/16 = 1.25

As per calculation of opportunity cost of aluminum it has been stated that opportunity cost of Australia is 2 and opportunity cost of Malaysia is 1.25. It has been analyzed that Malaysia is having the comparative advantage in comparison to Australia. This is because only 1.25 units of Aluminum is foregone for producing of extra units.

  1. Maximum price = 80/20 = 4

As per this calculation it has been determine than the Australia will mainly pay the maximum of 4 for getting 1 unit of Malaysian aluminum. By having the four unit of fertilizers the Australia can easily get the one unit of the particular aluminum. This has been generally depicted through the opportunity cost that is being computer among Australian and Malaysia. Through the years it has been suggested that a particular trip of in which the Australia result in getting the aluminum from Malaysia is considered to be advantages as the Malaysia will get for in exchange of one unit of aluminum.

  1. It has been indicated that each will generally want 5 million aluminum tones in which the price of 1-ton fertilizer will be 1.75 tons of aluminum. It can be demonstrated that the Australia will easily get one unit of aluminum by having the 0.5 for fertilizer in comparison to the self production that is recognized to be one unit of aluminum and the particular cost of therefore the greater 1.75 prove that Australia basically specializes in production of fertilizers so that they can exchange it cheaply with production of aluminum in Malaysia.



“Profit Maximizing – Output — Agricultural Law And Management”, Ag.Ndsu.Edu (Webpage, 2022),will%20not%20produce%20that%20unit.

“What Is Opportunity Cost?”, The Balance (Webpage, 2022)

(Webpage, 2022)

(Webpage, 2022)


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