Suppose That a Worker in Country a Can Make Either

question 99

Multiple Choice

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.Two possible consumption bundles that Country A could produce are:

• A) (5,000 bananas, 1,000 tomatoes) and (1,000 bananas, 5,000 tomatoes)
• B) (5,000 bananas, 0 tomatoes) and (2,500 bananas, 500 tomatoes)
• C) (2,500 bananas, 500 tomatoes) and (1,250 bananas, 800 tomatoes)
• D) (2,500 bananas, 750 tomatoes) and (1,250 bananas, 750 tomatoes)

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Definitions:

Stock Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a stock at a specified price within a specified time period.

Stock Price

The price at which a particular stock is bought or sold on the market.

Put Contract

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specified time.

Put Premium

A Put Premium is the price that the buyer of a put option pays to have the right to sell a specified amount of an underlying asset at a set price before the option expires.