Figure 3-3 Ice Cream and Cones Are Measured in Kilograms

question 96

Multiple Choice

Figure 3-3
Ice cream and cones are measured in kilograms.
-Refer to Figure 3-3. What does each of the two producers have a comparative or absolute advantage in?

• A) Ben has a comparative advantage in ice cream, and Jerry has an absolute advantage in both goods.
• B) Ben has a comparative advantage in cones, and Jerry has an absolute advantage in ice cream.
• C) Ben has a comparative advantage in ice cream, and Jerry has an absolute advantage in neither good.
• D) Ben has a comparative advantage in ice cream, and Jerry has an absolute advantage in cones.

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Definitions:

Cost of Goods Sold

This term refers to the direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.

Perpetual Inventory

An inventory management system where updates are made continuously to record sales and purchases, providing a real-time view of inventory levels.

Purchase Price

The amount of money paid or agreed to be paid by the buyer to acquire an asset, product, or service from a seller.

Purchase Discounts

Purchase discounts are reductions in price given by the supplier to the buyer for early payment or payment within a specified period.