Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars

question 311

Multiple Choice

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea.If we were to do this,measuring cars along the horizontal axis,then

• A) the slope of Japan's production possibilities frontier would be -5 and the slope of Korea's production possibilities frontier would be -3.
• B) the slope of Japan's production possibilities frontier would be -0.2 and the slope of Korea's production possibilities frontier would be -0.33.
• C) the slope of Japan's production possibilities frontier would be 0.2 and the slope of Korea's production possibilities frontier would be 0.33.
• D) the slope of Japan's production possibilities frontier would be 5 and the slope of Korea's production possibilities frontier would be 3.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Annuities

Financial products that guarantee a fixed or variable stream of payments over time, often used for retirement savings or to generate steady income during retirement.

Effective Annual Rate

The interest rate on a loan or financial product restated from the nominal rate as an annual rate, taking compound interest into account.

Compounded Value

Refers to the result of reinvesting the interest or earnings of an investment, causing it to grow exponentially over time.