Missouri Can Produce 10,000 Tons of Pecans Per Year or 5,000

question 235

Multiple Choice

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements is TRUE?

• A) Washington has an absolute advantage in the production of both pecans and pears.
• B) Washington has a comparative advantage in the production of both pecans and pears.
• C) Washington has a comparative advantage in producing pecans and Missouri has a comparative advantage in producing pears.
• D) Both answers A and C are correct.

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A transaction or event in which an acquirer takes control of one or more businesses, such as through merger or acquisition.

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The process of gradually writing off the initial cost of an asset over a period, in accordance with its estimated useful life.