-Suppose the Production Possibilities for Two Countries,producing Either Food or Clothing,are

question 37

Multiple Choice

-Suppose the production possibilities for two countries,producing either food or clothing,are shown in the above figure.They can each produce any linear combination as well.Suppose each country is in competitive equilibrium prior to free trade being allowed.Once free trade is allowed,the price of food will be

• A) two times the price of clothing.
• B) equal to the price of clothing.
• C) one-half the price of clothing.
• D) somewhere between one-half the price of clothing and the price of clothing, depending upon the relative bargaining power of the two countries.

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Definitions:

5 C's of Credit

The five key elements a lender analyzes when determining a borrower's creditworthiness: character, capacity, capital, collateral, and conditions.

Capital

Financial assets or the financial value of assets, such as cash and goods, working to create wealth through investment or production.

Operating Cash Flows

Cash generated from a company's normal business operations, indicating its ability to generate revenue.

Total Opportunity Cost

The overall cost of choosing one option when the value of the best alternative option is considered.