Snap and Bolt Are Two Countries That Both Produce Bananas

question 113

Essay

Snap and Bolt are two countries that both produce bananas and sugar.In Snap,each worker in a one-hour period can produce either 12 pounds of bananas or 3 pounds of sugar.In Bolt,each worker in a one-hour period can produce either 5 pounds of bananas or 2 pounds of sugar.Suppose both countries have constant opportunity cost of production and decide to specialize and exchange.The country that specializes in sugar is willing to sell 100 pounds of sugar for at least ________ pounds of bananas,and the other country will pay no more than ________ pounds of bananas.

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Definitions:

Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership interest of shareholders.

Note Payable

An obligation in the form of a promissory note, which requires the borrower to pay back the loan or debt to the lender at a future date.

General Journal

The primary accounting record used to record all types of transactions not assigned to other journals.

Equipment

Tangible property that is used in the operations of a business and has a useful life of more than one year.