Figure 2-13 Figure 2-13 Shows the Production Possibilities Frontiers

question 467

Multiple Choice

Figure 2-13 Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts.
-Refer to Figure 2-13. Which country has a comparative advantage in the production of coconuts?

• A) Guatemala
• B) They have equal productive abilities.
• C) Costa Rica
• D) neither country

---

Definitions:

Perpetual Bonds

Bonds that do not have a maturity date, allowing them to potentially pay interest forever, making them a form of permanent debt capital for the issuer.

Corporate Bonds

Fixed income securities issued by corporations to raise capital, promising to pay the bondholder a specified amount of interest over a specified period and to repay the principal upon maturity.

Real Return Bonds

Bonds that offer returns adjusted for inflation, ensuring that the investor's purchasing power is maintained regardless of inflation rate changes.

Term of Maturity

The length of time until the principal amount of a bond or other debt instrument must be repaid.