Table 3-37 ​

question 439

Multiple Choice

Table 3-37 ​
-​Refer to Table 3-37. Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can produce in a six-hour session of producing pottery. Sarah has an absolute advantage in

• A)​the production of vases and a comparative advantage in the production of vases.
• B)​the production of mugs and a comparative advantage in the production of mugs.
• C)​the production of neither good and a comparative advantage in the production of vases.
• D)​the production of both goods and a comparative advantage in the production of mugs.

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Definitions:

Overhead Rate

A rate used to allocate indirect costs to products or services, typically calculated as a ratio of overhead costs to a base such as direct labor hours or machine hours.

Direct Labour

The labor costs directly associated with the production of goods or services, such as wages for workers on the production line.

Overhead Rate

A calculation used to allocate indirect costs to products or services, typically expressed as a percentage or ratio.

Architectural Entity

A concept or structure in the discipline of architecture that can refer to buildings, facilities, and even urban design elements.