Consider the Following Scenario to Answer the Next Four Questions

question 4

Multiple Choice

Consider the following scenario to answer the next four questions: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.
-Specialization and trade allow individuals to:

• A) consume outside their own production possibilities frontier (PPF).
• B) shift their PPF outward.
• C) produce more goods with less technology.
• D) eliminate scarcity.
• E) produce fewer goods with less technology.

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Definitions:

Dividends Payable

Dividends payable are a liability on a company's balance sheet representing the amount of dividends that the company has declared but has not yet paid out to its shareholders.

Dividends Expense

The sum distributed from a portion of a company's earnings to its shareholders; often associated with preference shares.

Common Stock Dividend Distributable

Stockholders’ equity account that accumulates a stock dividend that has been declared but not yet issued and distributed.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock.