Suppose That in Colombia One Unit of Labor Can Produce

question 90

Multiple Choice

Suppose that in Colombia one unit of labor can produce 8 tons of papayas or 2 tons of bananas and in Brazil, one unit of labor can produce either 4 tons of papayas or 1 ton of bananas.Given this information, which of the following statements is true?

• A)Columbia has a comparative advantage in producing papayas but not bananas.
• B)Columbia has a comparative advantage in producing papayas and bananas.
• C)These countries would increase combined consumption if they specialized and traded.
• D)These countries cannot gain from trading.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation.

Financing Activity

Transactions involving the exchange of financial instruments, typically related to the borrowing, repaying, or raising of capital for a company.

Cash Inflow

The total amount of money being transferred into a business, typically from operational, investment, and financing activities.

Treasury Stock

Shares that were issued and subsequently repurchased by the company, reducing the amount of outstanding stock on the open market.