Zora Can Produce 4 Quilts in a Week and She

question 111

True/False

Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week. Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week. Zora has the comparative advantage in quilts and the absolute advantage in neither good, while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods.

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Definitions:

Permanent Working Capital

The minimum amount of working capital that a company needs to operate continuously.

Long-Term Debt

Borrowings by a company that are due for repayment after one year or more.

Tax Breaks

A reduction in the amount of taxes that an individual or company owes to the government, often used to incentivize certain behaviors or investments.

Net Working Capital

Net working capital is a financial metric that represents the difference between a company's current assets and current liabilities.