Table 1 Shows the Units of Output a Worker Can

question 17

Multiple Choice

Table 1 shows the units of output a worker can produce per month in Australia and Korea. ?
$\begin{array}{|l|l|l|}\hline & \text { Food } & \text { Electronics } \\\hline \text { Australia } & 20 & 5 \\\hline \text { Korea } & 8 & 2 \\\hline\end{array}$
?
Refer to table 1. Which of the following statements about comparative advantage is true?

• A) Australia has a comparative advantage in the production of both food and electronics.
• B) Korea has a comparative advantage in the production of both food and electronics.
• C) Australia has a comparative advantage in the production of food while Korea has a comparative advantage in the production of electronics.
• D) Korea has a comparative advantage in the production of food while Australia has a comparative advantage in the production of electronics.
• E) Neither country has a comparative advantage.

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Definitions:

Direct Materials

The raw materials that are directly incorporated into a finished product and can be directly attributed to the product.

Predetermined Manufacturing Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the manufacturing process begins based on estimated costs.

Total Cost

The complete cost of producing goods or services, including fixed and variable costs, which is used to determine profitability and pricing.

Unit Cost

The expenses associated with manufacturing, warehousing, and distributing a single unit of a product or service.