Given the Following Ricardo-Type Table Showing the Amount of Labor

question 12

Multiple Choice

Given the following Ricardo-type table showing the amount of labor input required to produce one unit of output of each of the two goods in each of the two countries:
$\begin{array}{lcc} &\underline{\text { Shirts}} &\underline{\text { Machines }}\\\text { France } & 3 \text { days } & 5 \text { days } \\\text { Germany } & 2 \text { days } & 4 \text { days }\end{array}$
France has an absolute advantage in __________ and a comparative advantage in __________.

• A) both goods; machines
• B) both goods; shirts
• C) neither good; machines
• D) neither good; shirts

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be eliminated through diversification.

Beta

Beta is a measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole, indicating its sensitivity to market movements.

Market Index

A hypothetical portfolio of investment holdings that represents a segment of the financial market, used as a benchmark to measure an investment's performance.

Standard Deviation

A statistical measurement of variation or dispersion around an average, indicating how much a set of numbers is spread out.