Answer:
D
Explanation:
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Consumer surplus = willingness to pay – price of the good
If consumers income increases, their demand for cell phone would increase. This would lead to an increase in price of the good.
Also, willingness to pay would ncrease as a result of income increase
If increase in willingess to pay exceeds increase in price, consumer surplus increases, if not it reduces. If the increase is the same, it remains the same
Question
In 2 hours, China can produce 6 bottles of milk. In 5 hours, it can produce 15 batches of pumpkins. What is the country's
opportunity cost of producing 1 bottle of milk (in terms of batches of pumpkins)?
your answer below:
Answer:
China's opportunity cost of producing 1 bottle of milk is equal to one batch of pumpkins.
Explanation:
Given that in 2 hours, China can produce 6 bottles of milk, and in 5 hours, it can produce 15 batches of pumpkins, to determine what is the country's opportunity cost of producing 1 bottle of milk (in terms of batches of pumpkins), the following calculation must be performed:
Milk = 6/2 = 3 per hour
Batches of pumpkins = 15/5 = 3 per hour
3/3 = 1
Therefore, China's opportunity cost of producing 1 bottle of milk is equal to 1 batch of pumpkins.
The Absolute Finance Company (AFC) earned $5 a share last year and paid a dividend of $2 per share. Next year, you expect AFC to earn $6 a share next year and continue its payout ratio. Assume that you expect to sell the stock for $45 a year from now. If you require a 13 percent return on this stock, how much would you be willing to pay for it?
Answer:
Explanation:
56. The Absolute Finance Company (AFC) earned $5 a share last year and paid a dividend of $2 per share. Next year, you expect AFC to earn $6 a share next year and continue its payout ratio. Assume that you expect to sell the stock for $45 a year from now. If you require a 13 percent return on this stock, how much would you be willing to pay for it? a. $41.95 b. $43.21 c. $45.13 d. $46.72 e. $47.40 ANS: A Expected dividend in one year = (2/5)(6) = $2.40 Value today = ($45 + $2.40)/(1.13) = $41.95
A company's interest expense is $20,000. Its income before interest expense and income taxes is $140,000. Its net income is $58,800. The company's times interest earned ratio equals:
Answer:
7 times
Explanation:
Interest expense = $20,000
Income before interest and tax = $140,000
Time interest earned ratio = Income before interest and tax / Interest expense
Time interest earned ratio = $140,000 / $20,000
Time interest earned ratio = 7 times
ABC LLC reported the following items on the LLC's Schedule K: ordinary income of $100,000; interest income of $3,000; long-term capital loss of ($4,000), charitable contributions of $1,000; AMT depreciation adjustment of $10,000, and cash distributions to partners of $50,000. How much will ABC show as net income (loss) on its Analysis of Income (Loss)
Answer:
$98,000
Explanation:
Use the following formula to calculate the net income
Net income = Ordinary income + Interest income - long term capital loss - Charitable contribution
Ordinary income = $100,000
Interest income $3,000
Long term capital loss = $4,000
Charitable contribution = $1,000
Placing values in the formula
Net Income = 100,000 + 3,000 - 4,000 - 1,000
Net Income = $98,000
Which of the following is not an example of what creates a hostile work environment?
1. Displaying sexually suggestive pictures or posters
2. Making sexual comments to other employees
3. All of these
4.Dispensing Assignments based on merit.
Answer:
4.Dispensing Assignments based on merit.
Explanation:
Dispensing Assignments based on merit is not an example of what creates a hostile work environment.
There are examples of what could cause a hostile work environment which include sexual harassment, use of foul language, etc.
However, giving assignments based on merit is not one of those.
Activity A is worth $100, is complete, and actually cost $150. Activity B is worth $500, is 75% complete, and has actually cost $400 so far. Activity C is worth $500, is 25% complete, and has actually cost $200 so far. What is the estimated cost at completion for this project, assuming current variances are typical of future variances?
Answer:
$1,375
Explanation:
Budget at completion = Worth of activity A + Worth of activity B + Worth of activity C
Budget at completion = $100 + $500 + $500
Budget at completion = $1,100
Earned value = Worth of activity A*% completed + Worth of activity B*% completed + Worth of activity C*% completed
Earned value = $100*100% + $500*75% + $500*25%
Earned value = $100 + $375 + $125
Earned value = $600
Actual cost = Actual cost of Activity A + Actual cost of Activity B + Actual cost of Activity C
Actual cost = $150 + $400 + $200
Actual cost = $750
Cost performance Index = Earned value / Actual cost
Cost performance Index = $600 / $750
Cost performance Index = 0.80
Cost performance Index = 80%
Estimate at completion = Budget at completion / Cost performance Index
Estimate at completion = $1,100 / 0.80
Estimate at completion = $1,375
Iron Company collects cash in full from a customer who purchased merchandise last month on credit. To record the receipt of cash, Iron Company should make the following entries in the general journal. (Check all that apply.) Multiple select question. Credit to Accounts Receivable Debit to Accounts Receivable Debit to Sales Credit to Cash Debit to Cash
Answer:
Credit to Accounts Receivable Debit to CashExplanation:
Accounts Receivable is an asset account that represents the cash owed to the company by customers who bought goods or services on credit.
When the credit is paid, the accounts receivable account will reduce and so will be credited because assets are credited when they reduce.
Cash on the other hand will be debited to show that it has increased as assets are debited when they increase.
Purchasing office supplies on account for $100 is recorded as: a. Supplies 100 Accounts Payable 100 b. Cash 100 Supplies 100 c. Supplies 100 Cash 100 d. Accounts Payable 100 Supplies 100 Multiple Choice Option b Option a Option d Option c
Answer: A. Supplies 100 Accounts Payable 100
Explanation:
It should bw noted that the purchase of supplies on account has to be recorded with a debit to supplies and a credit to the account payable.
Therefore, with regards to the question, the journal entry will be:
Debit Supplies $100
Credit Account payable $100
In this case, there'll be an increase in the supplies balance and an increase in the accounts payable as well.
Hence the correct option is A
A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:
Answer: 2.4%
Explanation:
Cash dividend = $0.85
Earnings per share = $3.50
Market price per share = $35.50
The dividend yield will be calculated as:
= Cash dividends / Market price per share
= $0.85 / $35.50
= 0.024
= 2.4%
The dividend yield is 2.4%.
If the return on stock A in year 1 was 6 %, in year 2 was 3 %, in year 3 was 18 % and in year 4 was 3 %, what was the standard deviation of returns for stock A over this four year period? (Round your answer to 1 decimal place and record without a percent sign. If your final answer is negative, place a minus sign before the number with no space between the sign and the number).
Answer:
12.4
Explanation:
We need to,first of all, determine the arithmetic average return of all the returns, which is the sum of the returns divided by the number of returns
average return=(6%+3%+18%+3%)/4
average return=7.50%
Years return (return-average return) (return-average return)^2
1 6.00% -1.50% 0.022500%
2 3.00% -4.50% 0.202500%
3 18.00% 10.50% 1.102500%
4 3.00% -4.50% 0.202500%
average return 7.50% variance 1.530000%
standard deviation=variance^(1/2) 12.4%
When a company issues 32,000 shares of $2 par value common stock for $20 per share, the journal entry for this issuance would include:_____.A. A debit to Additional Paid-in Capital for $76,000. B. A debit to Cash for $76,000. C. A credit to Common Stock for $760,000. D. A credit to Additional Paid-in Capital for $684,000.
Please the options provided are not correct for the question given.
Answer: When a company issued 32,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include a debit to cash for $640,000 , a credit to common stock and Additional paid in capital for $64,000 and $576,000 respectively.
Explanation:
Company issued = 32,000 shares
For par value = $2
Common stock for = $20 per share
The Journal Entry would be,
Accounts title and explanation Debit Credit
Cash ($32,000 shares x $20) $640,000
Common Stock (32,000 shares x $2) $64,000
Additional paid-In capital in excess par—common stock $576,000 ($640,000 - $64,000)
Suppose that the MPC is 0.8 and that $18 trillion of real GDP is currently being demanded. The government wants to increase real GDP demanded to $19 trillion at the same price level. By how much would it have to increase government purchases to achieve this goal (use the simple spending multiplier)?
Answer: $200 billion
Explanation:
First find the government spending multiplier:
Multiplier = 1 / (1 - MPC)
= 1 / (1 - 0.8)
= 5
The government wants to increase the real GDP to $19 trillion from $18 trillion which means that they want to increase it by $1 trillion.
In order to increase it by $1 trillion, the amount the government needs to spend is:
Increase in real GDP = Multiplier * Government spending
1 trillion = 5 * Government spending
Government spending = 1 trillion / 5
= $200 billion
Helix reported the following information in its financial statements. Write-offs of accounts receivable were $200 in the current year. Helix did not recover any write-offs.
At December 31 Current Year Prior Year
Accounts receivable $ 5,000 $ 4,000
Allowance for doubtful accounts 400 350
Accounts receivable, net $ 4,600 $ 3,650
Determine Bad Debts Expense for the current year.
Answer:
the Bad debt Expense for the Year is $250
Explanation:
The computation of the bad debt expense is given below:
Bad debt Expense for the Year is
= Current year of Allowance for Doubtful Accounts + Write off in Current Year - Prior year of Allowance for Doubtful Accounts
= $400 + $200 - $350
= $250
Hence, the Bad debt Expense for the Year is $250
During July, the production department of a process operations system completed and transferred to finished goods 24,000 units that were in process at the beginning of July and 72,000 that were started and completed in July. July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor. At the end of July, 29,000 additional units were in process in the production department and were 100% complete with respect to materials and 35% complete with respect to labor. The beginning inventory included labor cost of $52,400 and the production department incurred direct labor cost of $451,250 during July. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.
Answer:
the direct labor cost per equivalent unit for the department is $4.74 per unit
Explanation:
The computation of the direct labor cost per equivalent unit for the department is given below:
Equivalent units for direct labor cost is
= 24,000 unit + 72,000 units + 35% of 29,000
= 24,000 units + 72,000 units + 10,150 units
= 106,150 units
Now the direct cost per equivalent unit is
= ($52,400 + $451,250) ÷ 106,150 units
= $4.74 per unit
Hence, the direct labor cost per equivalent unit for the department is $4.74 per unit
What is the value of Yutter's stock at the end of Year 1 using the dividend discount model assuming that the dividend payout ratio remains constant and Yutter grows at its sustainable equity growth rate
Answer:
$557,000
Explanation:
Note: Missing word is attached as picture below
Retention Ratio = (Net Income - Dividends) / Net Income
Retention Ratio = (12500 - 3000) / 12500
Retention Ratio = 9500 / 12500
Retention Ratio = 0.76
Retention Ratio = 76%
Sustainable equity growth rate = Retention Ratio * Return on Equity
Sustainable equity growth rate = 76% * 15%
Sustainable equity growth rate = 11.40%
Expected dividend per share = Current Year Dividend *(100 + Growth Rate)%
Expected dividend per share = 3000 * (100+11.4)%
Expected dividend per share = 3000 * 111.4%
Expected dividend per share = 3342
Value of Stock = Expected dividend per share / (Cost of capital equity - Dividend growth rate)
Value of Stock = 3342 / (12% - 11.40%)
Value of Stock = $557,000
Question 12
0.5 pts
The goal of any monopolist is to maximize:
economic profits.
normal profits.
price.
consumer welfare.
output.
Answer:
economic profits.
Explanation:
A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. This ultimately implies that, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes.
Also, a monopolist refers to any individual that deals with the sales of unique products in a monopolistic market.
Generally, the goal of any monopolist is to maximize economic profits.
Basically, a monopolist earns an economic profit when the average total cost (AVC) of his goods and services is less than price.
Unlike a business firm operating in a perfectly competitive market, a monopolist can continue to earn economic profits in the long-run because there exist an extremely high level of barriers to entry for new business firms.
Listed here are product costs for the production of soccer balls. Identify each cost (a) as either fixed or variable and (b) as either direct or indirect by selecting the appropriate dropdowns.
Variable or Fixed Direct or Indirect Product Cost
1. Machinery depreciation (straight-line)
2. Rubber core for soccer balls
3. Insurance on factory
4. Factory rent
5. Needles used in stitching soccer balls
6. Leather covers for soccer balls
7. Annual flat fee paid for office security
TechPro offers instructional courses in e-commerce website design. The company holds classes in a building that it owns.
Identify each of TechPro's costs below as
(a) variable or fixed and (b) direct or indirect by selecting the appropriate dropdowns. Assume the cost object is an individual class. Variable or Fixed Direct or Indirect
1. Advertising
2. Salesperson salary
3. Instructional manuals for students
4. Monthly internet connection cost
5. Travel expenses for salesperson
6. Instructor wage (per class)
Answer:
Product Cost Variable Or fixed Direct or indirect
1. Rubber core for soccer ball Variable Direct
2. Thread to hold leather together Variable Indirect
3. Taxes on factory Fixed Indirect
4. Wages on Assembly workers Variable Direct
5. Machinery depreciation Fixed Indirect
6. Annual flat fees paid for office security Fixed Indirect
7. Leather cover for soccer balls Variable
On October 1, 2020 Vaughn Manufacturing issued 4%, 10-year bonds with a face value of $8130000 at 103. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. The entry to record the issuance of the bonds would include a credit of $243900 to Premium on Bonds Payable. credit of $162600 to Interest Payable. credit of $7886100 to Bonds Payable. debit of $243900 to Discount on Bonds Payable.
Answer: a credit of $243,900 to Premium on Bonds Payable.
Explanation:
The bonds were issued at a premium of 103 so the bond issue price is:
= 8,130,000 * 103/100
= $8,373,900
The premium is therefore:
= Issue price - Face value
= 8,373,900 - 8,130,000
= $243,900
This premium will be credited to the Premium on Bonds Payable account to show that the Bonds were issued for higher than their face value.
Medical profession is a very sensitive profession.Do U agree?Give 5 reason
Answer:
Medical profession is very sensitive and intellectual where human life is at risk. A successful effort of a doctor can save a life. Due to that, a doctor is known as 2nd God. When he attempts a major and long surgery, his endurance, hard work and mental ability spotlight his character.
What is a question that should be asked about accounts payable when forecasting?
What is the cash conversion cycle?
How will our cash inflows be affected?
How much product on hand is too much?
How quickly can we replenish goods?
Answer:
In forecasting accounts payable, one of the relevant questions is:
What is the cash conversion cycle?
Explanation:
The variables used in computing the cash conversion cycle include accounts receivable days, inventory turnover days, and accounts payable days. Specifically, cash conversion cycle (CCC) is the period in days that it takes the firm to convert cash into inventory, then into sales, and finally back into cash. To gain a good understanding of accounts payable, one should always consider the major inclusive metric.
g, Using your textbook and considering your discussion of the corporate culture of your subject company, describe 3-4 types of cultures or companies that currently exist which have the potential to have a major ethical problems in the future.
Answer:
Nestle - Irresponsible marketing of baby milk
Amazon - Avoiding tax
Coca Cola - Workers right violation at plant
Shell - Causing high environmental pollution
Explanation:
There are various ethical issues which businesses face today. There are problems of nepotism, harassment, discrimination, abuse of power and misrepresentation of financials. The company bad corporate culture also contributes towards unethical issues. There are various companies which maintains a brand image around the globe but are involved in unethical practices in someway. These companies are only concerned towards their uncountable profits and does not care about any ethical issue.
Sammy Co. uses process costing to account for the production of popcorn. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 20,000 units for materials and 18,200 units for conversion costs. Beginning inventory consisted of $6,200 in materials and $4,400 in conversion costs. May costs were $47,000 for materials and $32,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 55% for conversion). The cost per equivalent unit for conversion costs using the weighted average method would be:
Answer:
$2.00
Explanation:
Calculation to determine what The cost per equivalent unit for conversion costs using the weighted average method would be:
Using this formula
Cost per equivalent unit for conversion costs=Beginning inventory for conversion costs +May costs for conversion)/Equivalent units for conversion costs
Let plug in the formula
Cost per equivalent unit for conversion = ($4,400 + $32,000)/18,200
Cost per equivalent unit for conversion =$36,400/18,200
Cost per equivalent unit for conversion = $2.00
Therefore The cost per equivalent unit for conversion costs using the weighted average method would be:$2.00
Now- a quick question. Assume at the beginning of Year2, Becker Company has a credit (positive) balance in the AOCI account of $10800. Becker Company reports $653000 of net income for Year2. Becker has an unrealized gain of $12000 during Year2. The gain qualifies as OCI (Other comprehensive income). 1. What will Becker report as Accumulated Other Comprehensive Income on the Year2 balance sheet
Answer:
Becker Company
The amount that Becker will report as Accumulated Other Comprehensive Income on the Year 2 balance sheet is:
= $22,800.
Explanation:
a) Data and Calculations:
Year 2 Beginning balance:
Accumulated other comprehensive income (AOCI) = $10,800 credit
Year 2 reported net income = $653,000
Unrealized gain during Year 2 = $12,000
The Accumulated Other Comprehensive Income on the Year 2 balance sheet is:
Beginning balance $10,800
Unrealized gain 12,000
AOCI for Year 2 = $22,800
b) Becker's Accumulated Other Comprehensive Income includes unrealized gains and losses arising from some investments, pension plans, and hedging transactions. These are usually reported in the equity section of the balance sheet and then netted off from the retained earnings.
Your lobster fishing business is straightforward, and you run your accounting in Excel. You maintain separate workbooks for each year, and each workbook has a spreadsheet for every month. The monthly spreadsheets are identical except for their names, which are January, February, etc. You have found that you need to sum your diesel fuel expenditures, which are always recorded in cell D18, for the months of August through December. What three-dimensional formula would give you that result
Answer:
The three-dimensional formula that would give you the required result, that is suming the diesel fuel expenditures, which are always recorded in cell D18 for the months of August through December is:
=SUM(August:December!D18).
Explanation:
First, enter the excel starting formula "=SUM(". Type "August" or left-click on the August sheet with the mouse. Type in colon and December or hold the Shift key and left-click on the December sheet. Then, select the cell C3 in the December sheet. Before pressing "Enter," add a closing bracket. The sum formula looks exactly like this: "=SUM(August:December!D18)." This formula can completely be typed manually. The formula sums up cell D18 across each of the sheets from August to December, returning a value.
Project A requires a $ 385,000 initial investment for new machinery with a five year life and a salvage value of . The company uses straight - line depreciation . Project A is expected to yield annual net income of $ 23,100 per year for the next five years.
Required:
Compute Project A's payback period.
Answer:
4.2 years
Explanation:
Here is the complete question
Project A requires a $ 385,000 initial investment for new machinery with a five year life and a salvage value of $44,000. The company uses straight - line depreciation . Project A is expected to yield annual net income of $ 23,100 per year for the next five years.
Required:
Compute Project A's payback period.
Payback = amount invested / cash flow
cash flow = net income + depreciation
depreciation = (cost of asset - salvage value) / useful life
(385,000 - 44,000) / 5 = 68,200
Cash flow = 68,200 + $ 23,100 = 91300
$ 385,000 / 91300 =4.2
If the price elasticity of supply is 0.5 and the quantity supplied decreases by 6%, then the price must have decreased by 3%. a. True b. False
Answer: False
Explanation:
The price elasticity of supply measures the change in quantity supplied when the price changes.
The basic trend is that when price increases, quantity supplied increases as well. The reverse is true.
Price elasticity of supply = %Change in quantity supplied / % change in price
0.5 = -6% / Change in price
0.5 * Change in price = -6%
Change in price = -6% / 0.5
= -12%
The statement above is therefore false because price should have reduced by 12% for quantity supplied to reduce by 6%
Y3K, Inc., has sales of $6,349, total assets of $2,965, and a debt-equity ratio of 1.20. If its return on equity is 15 percent, what is its net income
Answer:
$202.16
Explanation:
Calculation to determine net income
First step
ROE = .15 = (Profit margin)(Total asset turnover)(Equity multiplier) = (PM)(S / TA)(1 + D/E)
Profit margin = [(ROE)(TA)] / [(1 + D/E)(S)]
Profit margin = [(.15)($2,965)] / [(1 + 1.20)( $6,349)]
Profit margin =444.75/13968
Profit margin = .03184
Now let determine the Net income
Profit margin = .03184 = Net income / Sales
Net income = .03184($6,349)
Net income = $202.16
Therefore the net income is $202.16
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs Variable $ 30 per unit Fixed $ 7,000,000 (per year) Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year Units produced 100,000 units Units sold 70,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.
Answer:
Sims Company
Income Statements Variable Costing Absorption Costing
Sales revenue $24,500,000 $24,500,000
Cost of goods sold:
Variable cost of manufacturing 9,100,000 9,100,000
Variable cost of selling and admin. 770,000 0
Fixed manufacturing cost 0 4,900,000
Total cost of goods sold $9,870,000 $14,000,000
Contribution margin $14,630,000 0
Gross profit 0 $10,500,000
Fixed /Period costs:
Fixed manufacturing cost $7,000,000 0
Selling and administrative expenses:
Variable $ 770,000
Fixed 4,250,000 4,250,000
Total period/fixed costs $11,250,000 $5,027,000
Net operating income $3,380,000 $5,473,000
Explanation:
a) Data and Calculations:
Manufacturing costs
Direct materials $ 40 per unit
Direct labor $ 60 per unit
Overhead costs
Variable $ 30 per unit
Total variable manufacturing cost per unit = $130
Fixed $ 7,000,000 (per year)
Selling and administrative costs for the year
Variable $ 770,000
Fixed $ 4,250,000
Production and sales for the year
Units produced 100,000 units
Units sold 70,000 units
Ending inventory = 30,000 units
Sales price per unit $ 350 per unit
Halsted Corp. has identified three cost pools in its manufacturing process: equipment maintenance, setups, and quality control. Total cost assigned to the three pools is $214,500, $101,400, and $153,000, respectively. Cost driver estimates for the pools are 10,000 machine hours, 150 setups, and 450 quality inspections, respectively.
Required:
Calculate the activity rate for each of Halsted's cost pools.
Answer:
Maintenance $21.45 per Machine Hour
Setup $676 per Setup
Quality Control $340 per Inspection
Explanation:
Calculation to determine the activity rate for each of Halsted's cost pools.
Activity rate for MAINTENANCE COST
Using this formula
Activity rate= Total maintenance cost / Total machine hours
Let plug in the morning
Activity rate=$214,500/ 10,000
Activity rate= $21.45 per Machine Hour
Activity rate for SETUPS
Using this formula
Activity rate= Total Setups /Setups
Let plug in the formula
Activity rate= $101,400/150
Activity rate=$676 per Setup
Activity rate for QUALITY CONTROL
Using this formula
Activity rate= Total Quality control /Quality inspections
Let plug in the formula
Activity rate= $153,000/450
Activity rate= $340 per Inspection
Therefore the activity rate for each of Halsted's cost pools will be:
Maintenance $21.45 per Machine Hour
Setup $676 per Setup
Quality Control $340 per Inspection
g A construction company builds roads with machinery (capital, K) and labor (L). If we plot the isoquants for the production function so that labor is on the horizontal axis, then a point on the isoquant with a small MRTS (in absolute value) is associated with high __________ use and low __________ use. A. labor; capital B. concrete; gravel C. capital; labor D. None of the above.
Answer:
A. labor; capital
Explanation:
In the production function theory, here we presume that the isoquants should be convex shaped and the MRTS should be isoquant slop that should be downward as it is shifted from left to right. Now if it is along on the horizontal axis that goes towards right so here MRTS falls and the labor rises. Due to increased in labor, the capital should falls because of the negative slope
Therefore the option a is correct
The point on the isoquant with a small MRTS (in absolute value) is associated with high labor use and low capital use.
In a production function theory, we will presume that the isoquants should be convex shaped and the MRTS should be isoquant slop hence, should be downward as it is shifted from left to right.
if the MRTS is along on the horizontal axis that goes towards right, hence, the MRTS falls and the labor rises.
Hence, due to the increase in labor, the capital should falls because of the negative slope.
Therefore, the Option A is correct since the point on the isoquant with a small MRTS (in absolute value) is associated with high labor use and low capital use.
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