Given Below Is the Production Possibilities Schedule for a Small

question 46

Multiple Choice

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3

-People (and all resources) :

• A)tend to specialize in those activities in which their opportunity costs are minimized.
• B)tend to specialize in those activities in which their opportunity costs are maximized.
• C)never consider opportunity costs before specializing in a particular activity.
• D)consider only direct costs while choosing to specialize in a particular activity.
• E)do not act in their own self-interest but specialize in those activities which benefit others.

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Definitions:

Acid-test Ratio

A stringent measure of liquidity that evaluates a company's ability to cover its short-term liabilities with its most liquid assets.

Receivable Turnover

A financial metric that measures how quickly a company collects payments from its customers by comparing sales to accounts receivable.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a particular period, indicating the efficiency of inventory management.

Current Ratio

A liquidity measure that indicates a company's ability to pay short-term obligations with its current assets.