In the Accompanying Diagrams, Solid Lines Are Production Possibilities Curves

question 262

Multiple Choice

In the accompanying diagrams, solid lines are production possibilities curves, and the dashed lines are trading possibilities curves. The trading possibilities curves imply that

• A) both countries have a trade surplus that will result in economic growth.
• B) the domestic production possibilities curves entail unemployment and/or the domestic misallocation of resources.
• C) world resources will be allocated more efficiently if the two nations specialize and trade based on comparative advantage.
• D) both nations will be worse off as a result of international specialization and trade.

Understand the importance of authenticity and intent in endorsing negotiable instruments.

Identify factors that affect a party's liability on a negotiable instrument.

Comprehend the requirements and effects of specific conditions or characteristics on the negotiability of instruments.

Understand the concept of limited attention and its implications on information processing.

---

Definitions:

Liquidation Surplus

The amount of money remaining after all liabilities and obligations of a liquidating entity have been settled, which is then distributed to shareholders.

Preference Shares

Shares that give holders preferential rights over common shareholders regarding dividends and assets distribution upon liquidation.

Ordinary Shares

Securities that represent ownership in a corporation, giving the holder voting rights and a share in the company's profits via dividends.

Deferred Creditor

An entity to whom a payment is owed but the payment is delayed or deferred to a future date.