Refer to the Diagram Below in Which Line AB Is

question 173

Multiple Choice

Refer to the diagram below in which line AB is Canadian production possibility curve and AC is its trading possibilities curve. The international exchange ratio between beef and cheese (terms of trade) :

• A) is the absolute value of slope of line AB.
• B) is the absolute value of slope of line AC.
• C) could lie anywhere between the absolute value of the slopes of lines AB and AC.
• D) cannot be determined on the basis of this information.

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Definitions:

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An individual, institution, or organization to whom money is owed by a debtor.

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