Use the Information Below to Answer the Following Questions

question 44

Multiple Choice

Use the information below to answer the following questions.
Fact 2.4.2
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.
-Refer to Fact 2.4.2. Which one of the following statements is true?

• A)Brenda has an absolute advantage over Agnes in the production of both goods.
• B)Agnes has a comparative advantage in the production of Y.
• C)Brenda has a comparative advantage in the production of X.
• D)Brenda will not gain from trade.
• E)Agnes will not gain from trade.

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Prepaid Insurance

An asset account that represents insurance payments made in advance and expensed over the coverage period.

Common Stock

Equity ownership in a corporation, representing a share in its assets and earnings.

Dividends

Money disbursed to shareholders from a firm's profits as a profit share.