Use the Information Below to Answer the Following Questions

question 94

Multiple Choice

Use the information below to answer the following questions.
Fact 2.3.3
In one hour, Sue can produce 50 caps or 10 jackets, and Tessa can produce 70 caps or 7 jackets.
-Refer to Fact 2.3.3. _______ has a comparative advantage in producing caps.If Sue and Tessa each specialize in producing the good in which they have a comparative advantage and trade 1 jacket for 7 caps, _______

• A)Tessa; Tessa loses but Sue gains
• B)Tessa; both Sue and Tessa gain
• C)Sue; Tessa gains but Sue loses
• D)Tessa; Sue loses but Tessa gains
• E)Sue; both Sue and Tessa gain

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Definitions:

Contribution Format

A type of income statement format that separates fixed from variable costs, highlighting the contribution margin.

Fibers Segment

A specific division or part of a company that deals with the production or sale of fibers, often within the textile industry.

Feedstocks Segment

This term refers to a division within a company or industry that deals with raw materials used for the production of chemical products or fuels.

Fixed Expenses

Costs that remain constant for a certain period of time regardless of changes in levels of production activity, such as lease payments or salaries of permanent staff.