Brazil Can Produce One Unit of Sugar Cane for One

question 231

Multiple Choice

Brazil can produce one unit of sugar cane for one unit of labor and one iPod for eight units of labor, and China can produce one unit of sugar cane for two units of labor and one iPod for four units of labor. What are each country's opportunity costs of producing iPods?

• A) Brazil: 4 units of sugar cane; China: 2 units of sugar cane
• B) Brazil: 8 units of sugar cane; China: 2 units of sugar cane
• C) Brazil: 1/8 unit of sugar cane; China: 1/2 unit of sugar cane
• D) Brazil: 1/2 unit of sugar cane; China: 1/2 unit of sugar cane

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Definitions:

Probability Distribution

A mathematical function that provides the probabilities of occurrence of different possible outcomes for an experiment.

NPV

The calculation of the current value of all future cash flows generated by a project, after accounting for the initial capital expenditure.

IRR

Internal Rate of Return; a metric used in capital budgeting to estimate the profitability of potential investments.

Probability Distributions

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.