Table 3-3 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes

question 153

Multiple Choice

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.

-Refer to Table 3-3.Assume that Zimbabwe and Portugal each has 60 machine minutes available.Originally,each country divided its time equally between the production of toothbrushes and hairbrushes.Now,each country spends all its time producing the good in which it has a comparative advantage.As a result,the total output increased by

• A) 4 toothbrushes and 2 hairbrushes.
• B) 10 toothbrushes and 5 hairbrushes.
• C) 16 toothbrushes and 8 hairbrushes.
• D) 20 toothbrushes and 10 hairbrushes.

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Definitions:

Expected Return

The anticipated amount of profit or loss an investment generates, based on historical data or probabilistic estimates.

Dividend

A payout to shareholders from a company's earnings, reflecting the company's earning power and success.

Stock Price

The current price at which a share of a company is being traded on the stock market.

Diversification

Diversification is an investment strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.