Q1. Illustrate what is the meaning of economies of scope and explain how do they differ from economies of scale?
Illustrate what do learning curves and explain how do they differ from economies of scale?
Illustrate what is the usefulness of learning curves as a managerial tool? Illustrate what is the reason for rising international trade in inputs and the use of foreign skilled labor?
Q2. The country of Aquilonia has a tax system identical to which of Canada. Assume someone in Aquilonia bought a parcel of land for $20 000 in 1960 when the cost index equaled 100. In 2002, the person sold the land for $100 000, and the cost index which is equal to 600. If the person must pay 20 percent of any capital gain in what is the after-tax real capital gain (in 2002 dollars) on the land?