The Following Table Summarizes the Production Relationships in Mexico and Guatemala

question 70

Multiple Choice

The following table summarizes the production relationships in Mexico and Guatemala to produce tomatoes and beer:Table 16.1
Hours of Labor Required to Produce

-Refer to Table 16.1. Which of the following statements is TRUE?

• A) Guatemala has an absolute advantage in producing tomatoes.
• B) Guatemala has an absolute advantage in producing beer.
• C) Guatemala has a comparative advantage in producing beer.
• D) Guatemala has a comparative advantage in producing tomatoes.
• E) all of the above

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Definitions:

Line of Credit

A credit facility extended by a bank or financial institution to a government, business, or individual, allowing them to borrow up to a predetermined limit.

Price Lining

A pricing strategy where products are sold at a limited number of price points, each representing a different level of quality or features.

Prestige Pricing

A pricing strategy where prices are set higher than normal because the product or service is perceived to be more prestigious or luxurious.

Odd Pricing

A pricing strategy where goods are priced slightly below a round number, such as $1.99 instead of $2.00, to make the price seem lower to consumers.