Answer the Question Using the Accompanying Cost Ratios for Two

question 230

Multiple Choice

Answer the question using the accompanying cost ratios for two products, fish (F) and chicken (C) , in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.Singsong: 1F = 2CHarmony: 1F = 4CWhich one of the following would not be feasible terms for trade between Singsong and Harmony?

• A)1 fish for 2½ chicken
• B)1 fish for 3 chicken
• C)1 chicken for 1/5 of a fish
• D)1 chicken for 1/3 of a fish

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Definitions:

Price Changes

Variations in the price level of goods and services over time, affecting purchasing power and inflation rates.

Gains and Losses

The financial increases (gains) or decreases (losses) in the value of an asset or investment from its purchase price, typically realized when the asset is sold.

Floating-Rate Debt

A type of debt instrument or loan whose interest payment varies with market interest rates.

Fixed-Rate Debt

A loan or security that has an interest rate that remains constant throughout the life of the loan, providing predictable repayment schedules.