Use the Table Below to Answer the Following Question

question 64

Multiple Choice

Use the table below to answer the following question. The table outlines the production possibilities of Slavia and Italia for food and clothing. The law of comparative advantage suggests that

• A)neither country could gain from trade, even if the costs of transporting the products were zero.
• B)Italia could not gain from trade because it has an absolute advantage in producing both goods.
• C)both countries could gain if Italia traded food for clothing produced in Slavia.
• D)both countries could gain if Slavia traded food for clothing produced in Italia.

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Definitions:

Book Value

The net value of a company's assets expressed on its balance sheet, equal to its total assets minus liabilities, preferred stock, and intangible assets.

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends.

Capital Stock

The original amount the owners paid into the company plus any additional paid-in capital to purchase stock in the company.