Use the Following to Answer Questions: Table: IPhone and IPod

question 76

Multiple Choice

Use the following to answer questions: Table: iPhone and iPod Production $$\begin{array} { l c c } \hline & \text { One iPhone } & \text { One iPod } \\\hline \text { Canadian labor units } & 3 & 4 \\\text { United States labor units } & 2 & 2 \\\hline\end{array}$$
-(Table: iPhone and iPod Production) According to the table on iPhone and iPod production, which of the following is TRUE?

• A) Canada has an absolute advantage in producing both iPhones and iPods.
• B) The United States has an absolute advantage in producing both iPhones and iPods.
• C) Canada has an absolute advantage in producing iPhones, and the United States has an absolute advantage in producing iPods.
• D) The United States has an absolute advantage in producing iPhones, and Canada has an absolute advantage in producing iPods.

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Definitions:

Total Revenue

The total income generated by a firm or economy from its sale of goods and services, calculated before any expenses are subtracted.

Profit Maximizing

The process by which a firm determines the price and output level that returns the greatest profit, often involving analysis of marginal costs and marginal revenues.

Shutdown

The short-term decision by a firm to cease production due to operating at a loss, where total revenue is not covering variable costs.

Implicit Costs

These refers to the opportunity costs that are not directly paid or incurred but represent the foregone benefits from using resources in a particular way.