Figure 3-1 -Refer to Figure 3-1.Assume Cliff and Paul Were Both Producing

question 142

Multiple Choice

Figure 3-1

-Refer to Figure 3-1.Assume Cliff and Paul were both producing wheat and corn,and each person was dividing his time equally between the two.Then each decides to specialize in the product in which he has a comparative advantage.Furthermore,they agree to trade 3 bushels of wheat for 3 bushels of corn.As a result of these new arrangements,Cliff is able to consume

• A)4 bushels of wheat and 3 bushels of corn, and this point lies on Cliff's production possibilities frontier.
• B)3 bushels of wheat and 3 bushels of corn, and this point lies outside of Cliff's production possibilities frontier.
• C)3 bushels of wheat and 2 bushels of corn, and this point lies on Cliff's production possibilities frontier.
• D)4 bushels of wheat and 3 bushels of corn, and this point lies outside of Cliff's production possibilities frontier.

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Definitions:

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Operation

The day-to-day activities and procedures businesses employ to produce goods or services and function effectively.

Potential New Business

Opportunities or prospects that may lead to the inauguration or expansion of operations, representing potential sources of revenue or growth.

Worthwhile Investment

An investment that promises a good return for the amount of money or time put in.