-Agnes Can Produce Either 1 Unit of X or 1

question 315

Multiple Choice

-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange

• A) if Agnes specializes in the production of X and Brenda specializes in the production of Y.
• B) if Agnes specializes in the production of Y and Brenda specializes in the production of X.
• C) only if Agnes becomes faster at producing X.
• D) only if Brenda becomes faster at producing X or Y.

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Definitions:

Cash Dividend

A cash dividend is a payment made by a company out of its earnings to shareholders, usually in the form of cash.

Common Stock

A type of security that represents ownership in a corporation, with rights to vote on corporate matters and receive dividends.

Cash Flow

Cash flow represents the net amount of cash and cash-equivalents being transferred into and out of a business over a specified period.

Investing Activities

Refers to the purchase and sale of long-term assets and other business investments within a specific period.