(Table: an Economy Before and After Trade) According to the Table

question 7

Multiple Choice

(Table: An Economy Before and After Trade) According to the table, what is the return to capital after trade occurs? The top part of the table gives manufacturing and agricultural prices, production, resource utilization, and resource payments in autarky (a no-trade situation) . The bottom part of the table provides (some of) the same information after trade occurs.

• A) $10.00 per unit
• B) $12.00 per unit
• C) $17.60 per unit
• D) $24.00 per unit

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Definitions:

Equity Method

This accounting approach is applied when an investor holds significant control over an investee, indicating a substantial interest but not full control or majority stake.

Consolidation Entries

Accounting entries used in preparing consolidated financial statements that eliminate transactions between the parent company and its subsidiaries.

Control Premium

An additional amount that a buyer is willing to pay over the current market value of a company to obtain controlling interest.

Consolidate

To combine assets, liabilities, and other financial items of two or more entities into one.