Why Does Spain Have an Absolute Advantage in Growing Saffron

question 1

Multiple Choice

Why does Spain have an absolute advantage in growing saffron?

• A) Spain has some of the lowest labour rates in the world so the time-consuming harvesting process is less expensive.
• B) Treaties limit which country can produce saffron.
• C) The spice is relatively inexpensive so other countries are not interested in growing it.
• D) Saffron thrives in Spain's climate and soil but does not do as well elsewhere.

---

Definitions:

Invested Sum

The total amount of money allocated towards an investment or project.

Discount Factor

The discount factor is a multiplier that adjusts the future value of a cash flow to its present value, reflecting the time value of money.

Discount Rate

The applied rate in discounted cash flow studies for turning future cash flows into their equivalent present-day financial value.

Cash Inflows

Money received by a business from its operations, investments, or financing activities.