Table 2-10 Table 2-10 Shows the Output Per Month of Month

question 151

Multiple Choice

Table 2-10
Table 2-10 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2-10. Which of the following statements is true?

• A) Fred has an absolute advantage in making both products.
• B) Barney has an absolute advantage in making both products.
• C) Barney has an absolute advantage in making pogo sticks and Fred in making unicycles.
• D) Barney has an absolute advantage in making unicycles and Fred in making pogo sticks.

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Definitions:

Construction Period Interest

Interest expense incurred during the construction of a long-term asset, which can be capitalized and added to the asset's cost basis.

IFRS Guidelines

The set of international accounting standards and principles that guide how financial statements should be prepared and disclosed.

Impairment Loss

A reduction in the recoverable amount of a fixed asset or goodwill below its carrying amount recorded on the balance sheet.

Input Market

The marketplace where resources or raw materials that a company uses to produce its products are bought and sold.