Consider a Country That Has Two Industries

question 98

Multiple Choice

Consider a country that has two industries.In the north,they grow wild rice,which requires a lot of rainfall.In the south,they grow wheat,which requires just a moderate amount of rainfall (too much rainfall is bad for wheat production) .One year,there is a record rainfall.This will result in

• A)a parallel shift inward of the production possibilities frontier.
• B)a parallel shift outward of the production possibilities frontier.
• C)the production possibilities frontier swiveling, with the wild rice intercept increasing, and the wheat intercept decreasing.
• D)the production possibilities frontier swiveling, with the wild rice intercept decreasing, and the wheat intercept increasing.
• E)none of the above.

---

Definitions:

Profit Margin

Profit Margin is a financial metric that measures the percentage of revenue remaining after all expenses have been deducted from sales.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, indicating the company’s profitability.

Net Sales

The net income from goods or services sold, after deducting returns, allowances, and discounts.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.