Scenario 20

question 11

Multiple Choice

Scenario 20.1 Suppose labor productivity differences are the only determinants of comparative advantage,and Brazil and Chile both produce only coffee and sugar.In Chile,either 5 units of coffee or 2 units of sugar can be produced in one day.In Brazil,a day of labor produces either 2 units of coffee or 1 unit of sugar.
-Refer to Scenario 20.1.What is the opportunity cost of producing coffee in Chile?

• A)Half a pound of sugar
• B)Two-fifth of a pound of sugar
• C)2 pounds of sugar
• D)One-third of a pound of sugar
• E)4 pounds of sugar

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Definitions:

Dislike of Uncertainty

A preference for predictable environments and a tendency to avoid situations with uncertain outcomes.

High Dividend Policy

A financial strategy where a company decides to pay out a high proportion of its earnings in the form of dividends to its shareholders.

Investors'

individuals or entities that allocate capital with the expectation of receiving financial returns.

High Dividend Payout

Refers to a situation where a company distributes a large portion of its earnings to shareholders in the form of dividends, often viewed as a sign of financial stability.