What are the two important functions that profits and losses perform, according to Ludwig von Mises,...

What are the two important functions that profits and losses perform, according to Ludwig von Mises, which cannot be replicated under socialism?

Expert Solution

We call the economy stationary when per person's wealth and income remains unchanged.That is when consumer spends more on some articles should be equal to he spends less on some articles.The amount of profit earned by one entrepreneur equals the total amount of loss suffered by another entrepreneurs.
A surplus of sum of all the profits generated by in the economy above the sum of all the losses suffered happens only in a capitalist economy.
The enrichment which is generated by additional capital goes to whom who have created by savings.Rest is used for increasing the marginal productivity of the labours and hence increases the wage rate.Also followed by increasing the prices of raw materials and food commodities ,to the owners of land and finally to the entrepreneurs who put this new capital for the economical production process.But as the gain of wage earners and owners of land is permanent ,the profit of owners goes away when this integration is accomplished.

Rahul Sunny answered 7 months ago

A, B are two partners sharing profits and losses in the ratio of 3:1

A, B are two partners sharing profits and losses in the ratio of 3:1. They admit K as a partner and he pays Rs. 30,000 as capital. The new ratio is to be 3:1:1. The goodwill of the firm is to be based on 3 years’ purchase of the average 4 years’ profits which are Rs. 15,000, 12,000, 18,000, 19,000.Required: Show the journal entries, if: (A) K pays for the goodwill in cash. (B) He is unable to bring the...

From the following payoff matrix, where the payoffs are the profits or losses of the two...

From the following payoff matrix, where the payoffs are the profits or losses of the two firms, determine (a) whether Firm A has a dominant strategy, (b) whether Firm B has a dominant strategy, and (c) the optimal strategy for each firm. Explain. Firm B Low price High price Firm A Low price (1, 1) (3, -2) High price (-2, 3) (2, 2) Prisoner’s Dilemma

5. What is the source of most profits and losses on foreign exchange trading? What foreign...

5. What is the source of most profits and losses on foreign exchange trading? What foreign currency activities provide a secondary source of revenue?

The table shows both prospective profits and losses for a company, depending on what decision is...

The table shows both prospective profits and losses for a company, depending on what decision is made and what state of nature occurs. Use the information to determine what the company should do. Show your work (regret table). State of Nature Decision s1 s2 s3 d1 30 80 −30 d2 100 30 −40 d3 −80 −10 120 d4 20 20 20 a. If an optimistic strategy is used. b. If a conservative strategy is used. c. If minimax...

explain what or the profits and losses of the US exporting our own goods abroad?

What are Nucleic acids? Why are they important? What are some of the important functions of...

What are Nucleic acids? Why are they important? What are some of the important functions of nucleic acids? Give a list of some important nucleic acids.

What role do PROFITS play in a perfectly competitive market? What role do LOSSES play in...

What role do PROFITS play in a perfectly competitive market? What role do LOSSES play in a perfectly competitive market?

The news reports the profits or losses of major businesses each quarter. What do you think...

The news reports the profits or losses of major businesses each quarter. What do you think when you hear that a corporation like Microsoft or BP has made billions of dollars in the last year? Does Adam Smith's Invisible Hand theory really help our economy and our society? Major corporations aside, what about the thousands of small businesses across the U.S. Are their profits justified, and do their profits help society through their taxes and corporate social responsibility? Last thought--if...

What is the semantic web? What logical functions does it perform? What is schema.org and what...

What is the semantic web? What logical functions does it perform? What is schema.org and what role does it serve?

What do profits and losses tell a firm? How does profit margin serve a social function?...

What do profits and losses tell a firm? How does profit margin serve a social function? How does Milton Friedman’s essay The Social Responsibility of Business is to Maximize its Profits address this problem? Is Friedman right? What are some limitations to his approach?

Question