Suppose That a Worker in Freedonia Can Produce Either 6

question 112

Multiple Choice

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year,and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year.Each nation has 10 workers.Without trade,Freedonia produces and consumes 30 units of corn and 10 units of wheat per year.Sylvania produces and consumes 10 units of corn and 30 units of wheat.Suppose that trade is then initiated between the two countries,and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat.Freedonia will now be able to consume a maximum of

• A)30 units of corn and 30 units of wheat.
• B)40 units of corn and 30 units of wheat.
• C)40 units of corn and 20 units of wheat.
• D)10 units of corn and 40 units of wheat.

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Definitions:

Dividend

A payout made by a corporation to its shareholders, usually as a distribution of profits.

Parent Company

A company that owns more than half of another company's stock and usually has a significant influence over it, often holding a controlling interest.

Constitution

The system of fundamental principles or established precedents according to which a state or other organization is governed.

Dividends Payable

represents a company's obligation to pay its shareholders a declared amount from its earnings.