Given the Following Classical-Type Table Showing the Number of Days

question 23

Multiple Choice

Given the following Classical-type table showing the number of days of labor inputRequired to obtain one unit of output of each of the two commodities in each of the two Countries:
$$\begin{array} { l l c } & \underline { \text { bicycles } } & \underline { \text { computers } } \\\text { United States } & \text { 4 days } & \text { 3 days } \\\text { United Kingdom } & 5 \text { days } & \text { 6 days }\end{array}$$
The United States has an absolute advantage in the production of __________.

• A) bicycles (only)
• B) computers (only)
• C) both bicycles and computers
• D) neither bicycles nor computers

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Definitions:

Flood Insurance

A type of insurance policy that covers property loss and damage due to flooding, often required in high-risk flood areas.

Flood Plains

Flat areas adjacent to rivers and streams that are subject to periodic flooding, often characterized by fertile soil.

Positive Correlation

A relationship between two variables in which both move in the same direction, meaning as one variable increases, the other also increases.

Moral Hazard

A situation in which one party is more likely to take risks because they do not bear the full consequences of their actions, often due to information asymmetry.