Scenario 34

question 45

Multiple Choice

Scenario 34.1 Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar.In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day.In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar.
Refer to Scenario 34.1.Calculate the opportunity cost of producing sugar in Brazil.

• A)Half a pound of coffee
• B)4 pounds of coffee
• C)1 pound of coffee
• D)2 pounds of coffee
• E)One and a half pounds of coffee

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Definitions:

Operating Activities

Business actions directly involved in the production and delivery of goods and services, as reflected in the cash flow statement.

Current Accounts

A type of demand deposit account that allows withdrawals and deposits, typically used by businesses for their frequent money transactions.

Financing Activities

Transactions and events where cash flow comes into the company to help in financing its operations or to fund the expansion of its business.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not included in cash equivalents.