Table 3-22 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes

question 24

Multiple Choice

Table 3-22
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
-Refer to Table 3-22. Zimbabwe and Portugal would not be able to gain from trade if Zimbabwe's opportunity cost of one toothbrush changed to

• A)0 hairbrushes.
• B)5/6 hairbrushes.
• C)6/5 hairbrushes.
• D)Zimbabwe and Portugal can always gain from trade regardless of their opportunity costs.

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Definitions:

Annuities

Financial products that provide a series of payments over time, often used for retirement income.

Internal Rate

Often refers to the internal rate of return (IRR), which is a metric used to evaluate the profitability of potential investments.

Minimum Required

The least amount or level needed for a specific purpose, such as the minimum required investment or stock balance.

Net Present Value

The difference between the present value of an investment project’s cash inflows and the present value of its cash outflows.