The Following Is the Production Possibilities Data for Two Countries

question 94

Multiple Choice

The following is the Production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The above data show that:

• A)Beta has a comparative advantage in producing chips.
• B)Alpha has a comparative advantage in catching fish.
• C)Alpha is subject to constant costs and Beta is subject to increasing costs.
• D)Beta is more efficient than Alpha.

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Definitions:

Common Stock

Shares of ownership in a corporation that entitle holders to vote at shareholder meetings and receive dividends.

Convertible Preferred Stock

A type of preferred stock that holders can convert into a specified number of common shares, usually at any time after a predetermined date.

Preferred Stock Conversion

The process by which holders of preferred shares can convert their stocks into a predetermined number of common shares, often under specific conditions.

Dividends in Arrears

Dividends on cumulative preferred stock that have not been declared or paid for the current or previous periods, accumulating until they are paid out.