Answer the Question on the Basis of the Following Production

question 62

Multiple Choice

Answer the question on the basis of the following production possibilities tables for two countries,North Cantina and South Cantina: Refer to the tables.Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods.We can conclude that:

• A) North Cantina is fully and efficiently using its resources,but South Cantina is not.
• B) South Cantina is fully and efficiently using its resources,but North Cantina is not.
• C) neither South Cantina nor North Cantina is fully and efficiently using its resources.
• D) both South Cantina and North Cantina are fully and efficiently using their resources.

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Definitions:

Interest Rate

The percentage charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows or investments.

Lease Payments

The payments made under a lease agreement to the lessor for the use of an asset over a specified period.

Guaranteed Rate

A predetermined interest rate assured by a lender or issuer to the borrower or investor over a certain period.