Use the Information Below to Answer the Following Questions

question 150

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.
-Complete the following sentence. Given Fact 2.4.2,

• A)there will be gains from trade, no matter what Brenda and Agnes specialize in, as long as they specialize.
• B)there will be gains from trade only if Agnes specializes in the production of Y and Brenda in X.
• C)there will be gains from trade only if Agnes becomes faster at producing X.
• D)there will be no gains from trade because Agnes has an absolute advantage.
• E)there will be gains from trade if Agnes specializes in the production of X and Brenda in Y.

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Definitions:

Capacity Analysis

A technique used to determine the production capacity needed by an organization to meet changing demands for its products.

Customer Service Department

A specialized division within a company that handles inquiries, resolves issues, and maintains positive relationships with customers.

Time-Driven Activity-Based Costing

A method of costing that assigns costs to products or services based on the actual time taken to produce or provide them, rather than on estimated absorption rates.

Capacity Analysis

The assessment of an organization's ability to meet current and future demand levels with its existing resources.