Based on This Table, Which Statement Is True A) Cambodia Has a Comparative Advantage in Maize Production

question 143

Multiple Choice

Based on this table, which statement is true? $$\begin{array}{l}\text { Output (in kilograms) per Worker per Day }\\\begin{array} { c c c } \text { Country } & \text { Maize } & \text { Rice } \\\text { Cambodia } & 60 & 20 \\\text { Laos } & 30 & 15\end{array}\end{array}$$

• A) Cambodia has a comparative advantage in maize production.
• B) Laos has a comparative advantage in rice production.
• C) Both countries have comparative advantages.
• D) Neither country has a comparative advantage.

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Definitions:

Manufacturing Overhead

Refers to all manufacturing costs excluding the direct costs of labor and materials, such as rent, utilities, and equipment depreciation.

Direct Labor-Hours

The total time worked by employees who are directly involved in the manufacturing process of a product.

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to products or services, based on a preselected activity base.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor expenses.