The Opportunity Cost of Producing One Ton of Wheat for Country

question 224

Multiple Choice

The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?

• A) Gamma
• B) Beta
• C) Neither country has a comparative advantage.
• D) Both countries have the comparative advantage.

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Definitions:

Automated Equipment

Machinery that operates with minimal human intervention, often used to increase efficiency and consistency in production.

Profitability Index

A financial metric that measures the return on investment for a project or investment relative to its cost.

Investment Projects

Initiatives undertaken by corporations or investors that involve significant capital outlay with the expectation of earning a return on investment over time.

Discount Factor

A multiplier used to determine the present value of future cash flows, reflecting the time value of money.