Table 3-8 Assume That Kito and Penda Can Switch Between Producing Baskets

question 29

Multiple Choice

Table 3-8
Assume that Kito and Penda can switch between producing baskets and producing birdhouses at a constant rate.

-Refer to Table 3-8.Assume that Kito and Penda each has 24 labor hours available.If each person divides their time equally between the production of baskets and birdhouses,then total production is

• A) 4.75 baskets and 2 birdhouses.
• B) 9.5 baskets and 12 birdhouses.
• C) 16 baskets and 12 birdhouses.
• D) 19 baskets and 24 birdhouses.

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Definitions:

Treasury Bond

A long-term, fixed-interest U.S. government debt security with a maturity of more than ten years.

Yield

Yield is the income return on an investment, expressed as a percentage of the investment’s cost or current market value, commonly used for bonds and dividend-paying stocks.

Zero-Coupon Bonds

Bonds that don’t make periodic interest payments but are issued at a discount to their face value and redeemable for the face amount at maturity.

Expected Interest Rate

The anticipated rate at which interest is to be paid by a borrower for the use of money.