Graph 3-2 These Figures Illustrate the Production Possibilities Available

question 75

Multiple Choice

Graph 3-2 These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour.
-According to Graph 3-2:

• A)Amy should specialise in doughnuts, and Jim should specialise in coffee
• B)Amy should specialise in coffee, and Jim should specialise in doughnuts
• C)Amy should specialise in coffee, and Jim should specialise in neither goods
• D)Amy should specialise in both goods, and Jim should specialise in coffee

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuing party, often used in the accounting of share capital.

Capital in Excess of Par

The amount by which the proceeds from the issuance of shares exceed the par value of the shares, often recorded in the shareholders' equity section of the balance sheet.

Homemade Dividend

A strategy where investors create their own dividend policy by selling a portion of their portfolio.

Required Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.