Table 3.2 -Consider Two Individuals, Jesse and April, Who Hand Paint Kites

question 109

Multiple Choice

Table 3.2

-Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?

• A) April has a comparative advantage in painting kites but not snowboards.
• B) April has a comparative advantage in painting snowboards but not kites.
• C) April has a comparative advantage in painting both goods.
• D) April does not have a comparative advantage in painting either good.

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Definitions:

Segmented Income Statement

A financial statement that breaks down revenues, cost of goods sold, and expenses by different segments of a business, such as product lines or geographical areas.

Contribution Format

A financial reporting format that focuses on distinguishing between fixed and variable costs and calculating the contribution margin.

Common Fixed Expenses

Overhead costs shared by multiple business units or product lines, which are not attributable to any single unit or product.

Break-even

The point at which total revenues equal total expenses, resulting in no net loss or gain.