If the World Price of Sugar Is Lower Than Brazil's

question 54

Multiple Choice

If the world price of sugar is lower than Brazil's domestic price of sugar without trade,then Brazil

• A) should import sugar.
• B) has a comparative advantage in sugar.
• C) should produce just enough sugar to satisfy domestic demand.
• D) should produce no sugar domestically.

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Definitions:

After-Tax Discount Rate

The rate used to discount future cash flows to their present value, taking into account the effects of taxes.

Straight-Line Depreciation

A method of calculating depreciation of an asset by evenly spreading its cost over the expected useful life.

After-Tax Discount Rate

The rate used to discount future cash flows to their present value after accounting for the effects of taxes, reflecting the net cost of capital to the company.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income, which can vary by income level and jurisdiction.