Use the Following to Answer Questions

question 85

Multiple Choice

Use the following to answer questions:
Figure: Comparative Advantage
-(Figure: Comparative Advantage) The figure illustrates both the U.S. and Japanese production possibilities frontiers for TVs and wheat. Based on this information, which of the following is TRUE?

• A) The United States has the comparative advantage in the production of TVs.
• B) The United States has the comparative advantage in the production of wheat.
• C) Japan has the comparative advantage in the production of wheat.
• D) Japan has the absolute advantage in the production of TVs.

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Definitions:

Dividends Expected

The forecasted payments made by a corporation to its shareholders, typically derived from the company's profits.

Constant Dividend

A dividend policy in which a company pays a fixed dividend per share, unaffected by its earnings volatility.

Rate of Return

The increase or decrease in the value of an investment during a predetermined timeframe, represented as a proportion of the investment's original price.

Dividend Next Year

The projected amount of money to be paid to shareholders from a company's earnings in the forthcoming fiscal year.