Table 3-8 Assume That England and Spain Can Switch Between Producing Cheese

question 92

Multiple Choice

Table 3-8
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
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-Refer to Table 3-8. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring cheese along the horizontal axis, then

• A)the slope of England's production possibilities frontier would be -0.67 and the slope of Spain's production possibilities frontier would be -0.5.
• B)the slope of England's production possibilities frontier would be -1.5 and the slope of Spain's production possibilities frontier would be -2.
• C)the slope of England's production possibilities frontier would be -.75 and the slope of Spain's production possibilities frontier would be -1.
• D)the slope of England's production possibilities frontier would be -2 and the slope of Spain's production possibilities frontier would be -.5.

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Definitions:

Short-Term Creditors

Short-term creditors are lenders or suppliers to whom a company owes money that is due to be paid back within a short period, typically within one year.

Liquidity

A measure of how easily assets can be converted into cash without significant loss of value.

Supplier

A party that provides goods or services to another entity, typically in a B2B (business-to-business) relationship.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities.