The Tables Give Production Possibilities Data for Two Countries, Alpha

question 252

Multiple Choice

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. The given data show that

• A)Beta has a comparative advantage in producing chips.
• B)Alpha has a comparative advantage in catching fish.
• C)Alpha is subject to constant costs and Beta is subject to increasing costs.
• D)Beta is more efficient than Alpha both in catching fish and in producing chips.

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Definitions:

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick assets, which exclude inventory.

Quick Ratio

A liquidity ratio that measures a company's ability to pay its short-term obligations with its most liquid assets.

Current Ratio

A financial ratio indicating a firm's capacity to settle short-term debts or liabilities due within the next 12 months.

Horizontal Analysis

A financial analysis technique comparing historical data, such as revenues or profits, over a series of periods to identify trends or patterns.