Use the Following to Answer Questions: Table: Movies and Oil

question 68

Multiple Choice

Use the following to answer questions: Table: Movies and Oil $$\begin{array}{l}\text { Hypothetical maximum production in various U.S. states }\\\begin{array} { l c c } \hline & \text { Movies/Year } & \text { Barrels of Oil/Year (millions) } \\\hline \text { Texas } & 75 & 50 \\\text { California } & 60 & 30 \\\text { New York } & 20 & 5 \\\hline\end{array}\end{array}$$
-(Table: Movies and Oil) According to the table, which state has the comparative advantage in oil?

• A) Texas, because it can produce more oil than anyone else
• B) New York, because its opportunity cost for a barrel of oil is 4 movies per year
• C) Texas, because its opportunity cost for a barrel of oil is 1.5 movies per year
• D) California, because its opportunity cost for a barrel of oil is 2 movies per year

---

Definitions:

Physical Flow of Goods

Refers to the actual movement of goods through the production process to the customer, distinct from the accounting or paper flow.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a dataset, assigning weights to each number based on its significance.

Weighted Average

A computation that considers the different levels of significance of the figures in a collection of data, giving greater emphasis to certain numbers over others.

FIFO

An inventory valuation method that assumes the first items purchased are the first items sold, standing for First-In, First-Out.