Table 3-3 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes

question 304

Multiple Choice

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.

-Refer to Table 3-3.Zimbabwe has an absolute advantage in the production of

• A) toothbrushes and a comparative advantage in the production of toothbrushes.
• B) toothbrushes and a comparative advantage in the production of hairbrushes.
• C) hairbrushes and a comparative advantage in the production of toothbrushes.
• D) hairbrushes and a comparative advantage in the production of hairbrushes.

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Definitions:

Equally-Weighted Portfolio

An investment portfolio where each asset is allocated the same proportion of the total investment.

Securities

Assets indicating ownership in a company available on the stock market, indebtedness to either a corporate or government issuer, or entitlements to ownership through an option.

Two-Factor Economy

An economic model that considers two distinct factors or variables influencing outcomes, often used in finance to analyze returns or risks.

Expected Return

The average return an investor anticipates receiving on an investment if it is held for a specific period of time.