(Table: Econoland and Macroland Annual Production Capacity in Tons) Based

question 18

Multiple Choice

(Table: Econoland and Macroland Annual Production Capacity in Tons) Based on the table, which statement correctly identifies the situation described therein? $$\begin{array} { | l | l | l | } \hline & \text { Cabbages } & \text { Oranges } \\\hline \text { Econoland } & 50,000 & 40,000 \\\hline \text { Macroland } & 80,000 & 72,000 \\\hline\end{array}$$

• A) Macroland's opportunity cost of producing cabbages is 0.9 ton of oranges and Econoland's is 0.8 ton of oranges, which means Econoland has comparative advantage in cabbage production.
• B) Macroland's opportunity cost of producing cabbages is 1.25 tons of oranges and Econoland's is 1.11 tons of oranges, which means Macroland has comparative advantage in cabbage production.
• C) Macroland's opportunity cost of producing cabbages is 0.9 ton of oranges and Econoland's is 0.8 ton of oranges, which means Macroland has comparative advantage in cabbage production.
• D) Macroland's opportunity cost of producing cabbages is 1.25 tons of oranges and Econoland's is 1.11 tons of oranges, which means Econoland has comparative advantage in cabbage production.

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Definitions:

Compounded Annually

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a loan or deposit.

Inheritance

Wealth or attributes passed on to heirs upon the death of an individual.

Lump Sum

A lump sum is a single payment of money, as opposed to a series of payments made over time.