Consider the Following Information About the Production of Two Goods,X

question 70

Multiple Choice

Consider the following information about the production of two goods,X and Y,in two countries,A and B: • In Country A it takes X_a units of resources to produce one unit of X and Y_a units of resources
To produce one unit of Y.
• In Country B it takes X_b units of resources to produce one unit of X and Y_b units of resources
To produce one unit of Y.
• Assume the amount of resources used to produce the goods in the two countries can be
Compared unambiguously.
TABLE 32-1
Refer to Table 32-1.Country A has a comparative advantage in producing good X if

• A)(X_a/Y_a)is less than (X_b/Y_b).
• B)(X_a/X_b)is greater than (Y_a/Y_b).
• C)(X_a/Y_a)is greater than (X_b/Y_b).
• D)X_a is less than Y_b.
• E)X_a = X_b.

---

Definitions:

Days' Sales In Inventory

A financial metric indicating the average number of days that a company holds its inventory before selling it.

Full-Capacity Level

The maximum level of output a company can produce and sell with its current resources and without incurring significant additional costs.

Operating Capacity

The maximum amount of work that an organization can complete in a given period under normal circumstances.

Sales

The total amount of goods or services sold by a company during a specific period, often seen as a critical measure of business performance.