Deb Grows Flowers and Makes Vases

question 158

Multiple Choice

Deb grows flowers and makes vases. D'Arcy also grows flowers and makes vases, but Deb is better at producing both. Who has an absolute or comparative advantage in what activity?

• A) Deb has an absolute advantage in both activities.
• B) D'Arcy has an absolute advantage in both activities.
• C) Deb has a comparative advantage in growing flowers.
• D) D'Arcy has a comparative advantage in growing flowers.

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Definitions:

Debit/Credit

Fundamental aspects of all accounting transactions, where debits are entries on the left side, and credits are entries on the right side, used to record business transactions in the ledger.

Dividend

Money dispensed by a corporation to its owners/shareholders, generally from the company's earnings.

Investment Income

Income coming from interest payments, dividends, capital gains, and other profits made through an investment.

Associated Companies

Companies that are connected through common ownership or control but aren't subsidiaries or fully owned entities of the parent company.