Given the Following Production Possibilities Schedules, It Can Be Seen

question 11

Multiple Choice

Given the following production possibilities schedules, it can be seen that:

• A) Brazil has a comparative advantage in producing wine.
• B) Poland can produce more machines than Brazil.
• C) Brazil has a comparative advantage in producing machines.
• D) Poland can produce more of both goods than Brazil.

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Definitions:

Minimum Acceptable Return

The lowest return on investment that a company or individual is willing to accept when making an investment decision.

Residual Income

The amount of income that an individual or company has after all personal debts and expenses, including the cost of capital, have been paid.

Transfer Price

Transfer price is the price at which goods and services are transferred between departments or subsidiaries of the same company.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.