Suppose That a Worker in Country a Can Produce Either

question 88

Multiple Choice

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Suppose that a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has an absolute advantage at:

• A) producing bananas, but not tomatoes.
• B) producing bananas and tomatoes.
• C) producing tomatoes, but not bananas.
• D) producing neither good.

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Definitions:

Issues Common Stock

The process by which a corporation sells new shares of its common stock to investors, thereby raising capital.

Decreases

A reduction in the value, amount, or number of something.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, and obsolescence.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, reflecting its use and wear over time.