Table 3-10 Assume That Japan and Korea Can Switch Between Producing Cars

question 328

Multiple Choice

Table 3-10
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
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-Refer to Table 3-10. We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea. If we were to do this, measuring airplanes along the horizontal axis, then

• A)the slope of Japan's production possibilities frontier would be -5 and the slope of Korea's production possibilities frontier would be -3.
• B)the slope of Japan's production possibilities frontier would be -0.2 and the slope of Korea's production possibilities frontier would be -0.33.
• C)the slope of Japan's production possibilities frontier would be 0.2 and the slope of Korea's production possibilities frontier would be 0.33.
• D)the slope of Japan's production possibilities frontier would be 5 and the slope of Korea's production possibilities frontier would be 3.

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Definitions:

Net Present Value

The difference between the current value of cash inflows and the current value of cash outflows over a period of time.

Dividend Policy

The policy a company uses to decide how much it will pay out to shareholders in dividends. It involves whether to distribute profits to shareholders or reinvest them in the business.

Residual Dividend

A policy where dividends are paid to shareholders from the leftover or "residual" profits after all operational and capital expenditures are met.