If Colombia Has a Comparative Advantage Over Mexico in the Production

question 90

Multiple Choice

If Colombia has a comparative advantage over Mexico in the production of coffee, then:

• A)Colombia likely sells coffee to Mexico.
• B)Mexico is more productive at making coffee than Colombia.
• C)Colombia has the ability to produce more coffee than Mexico with the same resources.
• D)Mexico should trade coffee to Colombia.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Residual Value

Residual Value is the estimated amount that an asset will realize upon its sale at the end of its useful life.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life, providing a consistent annual depreciation expense.

Residual Value

The anticipated salvage value an asset will have after its period of use has ended.