The Following Classical-Type Table Shows the Number of Days of Labor

question 27

Multiple Choice

The following Classical-type table shows the number of days of labor input required to obtain one unit of output of each of the two commodities in each of the three countries:
$\begin{array} { l l l } &\underline{ \text { clothing }} & \underline{\text { wheat }} \\\text { Spain } & 3 \text { days } & 6 \text { days } \\\text { United States } & 2 \text { days } & 5 \text { days } \\\text { England } & 4 \text { days } & 6 \text { days }\end{array}$

Given this information, the United States has an absolute advantage over Spain in

• A) both goods, and the United States also has an absolute advantage over England in Both goods.
• B) both goods, but the United States has an absolute advantage over England in neither Good.
• C) neither good, but the United States has an absolute advantage over England in both Goods.
• D) neither good, and the United States also has an absolute advantage over England in Neither good.

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Definitions:

Undisclosed Principal

A legal term referring to a situation where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party involved in the transaction.

Formalities

Specific procedures, requirements or conditions that are mandated by law or established practice.

Partnership

A form of business organization; specifically, an association of two or more persons to carry on a business as co-owners for profit.

Leases

Contracts in which one party, the lessor, grants another party, the lessee, the right to use an asset for a specified period in return for regular payments.