Scenario 34

question 21

Multiple Choice

Scenario 34.2 Suppose labor productivity differences are the only determinants of comparative advantage, and both Egypt and produce only corn and cocoa.In Egypt, 10 bushels of corn or 15 pounds of cocoa can be produced in a day.In Ghana, one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa.
Based on Scenario 34.2, which of the following terms of trade would benefit both countries?

• A)1 pound of cocoa is equal to 0.10 bushels of corn
• B)1 pound of cocoa is equal to 2 bushels of corn
• C)1 pound of cocoa is equal to 1 bushels of corn
• D)1 pound of cocoa is equal to 0.5 bushels of corn
• E)1 pound of cocoa is equal to 1.5 bushels of corn

Evaluate the impact of transaction costs on specialization and the law of comparative advantage.

Explain the relationship between opportunity costs, time, and decision-making.

Understand the influence of economic incentives on individual's choices, including work, education, and consumption.

Understand the historical trends in federal spending on defense and healthcare.

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Definitions:

Checking Account

A bank account from which payments can be ordered by the account holder, typically used for day-to-day financial transactions.

Accounts Payable Aging

A report that categorizes a company's accounts payable according to the period of time an invoice has been outstanding, helping to manage debts effectively.

Accounts Receivable Aging

A report detailing the amounts owed to a business, categorized by the length of time the invoices have been outstanding.

Vendor Summary

A report or overview that shows the amounts owed to and transactions made with suppliers or service providers.