In a Single Year,the Netherlands Can Raise 100 Tons of Beef

question 257

Multiple Choice

In a single year,the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season,Belgium can raise 50 tons of beef or produce 750 boxes of tulips.Trade will take place between these two countries if 1 ton of beef costs _____ boxes of tulips.

• A)20
• B)5
• C)12
• D)8

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Definitions:

Loan

A sum of money borrowed by one party from another, subject to repayment of the principal amount with interest.

Amortized

The process of gradually writing off the initial cost of an asset over a period.

Interest Paid

This is the amount of money paid by a borrower to a lender in return for the use of borrowed money, usually expressed as a percentage of the principal.

Effective Rate

The actual interest rate an investor earns or pays on an investment or loan, taking into account the effect of compounding.