The Tables Give Production Possibilities Data for Two Countries, Alpha

question 48

Multiple Choice

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Assume the production possibilities in Beta double at alternatives A through E, while remaining as shown in the table for Alpha. As a result, Beta should

• A)continue to specialize in producing chips.
• B)continue to specialize in fishing.
• C)no longer specialize and trade.
• D)specialize both in fishing and in producing chips and sell the surplus to Alpha.

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Definitions:

Par Common Stock

The stated face value of a share of common stock, which has no direct impact on its market value.

Total Effect

The overall impact or outcome that results from a particular action or set of circumstances, often used in the context of economic or policy analysis.

Stockholders' Equity

The ownership interest of shareholders in the assets of a company after all debts have been paid off.

Statement of Stockholders' Equity

A financial statement that shows changes in the equity section of a company's balance sheet during a period, including net income, dividends paid, and other equity transactions.