Table 34-3 ​

question 5

Multiple Choice

Table 34-3
​
​
Output Per Unit Labor Input
​
Cotton
Wheat
Egypt
10
2
United States
20
20
-The data in Table 34-3 indicate that the United States has

• A)an absolute advantage in both goods, and a comparative advantage in cotton.
• B)an absolute advantage in both goods, and a comparative advantage in wheat.
• C)only a comparative advantage in wheat.
• D)only a comparative advantage in cotton.

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Definitions:

Production Activity

The process of transforming raw materials into finished goods or services.

Work in Process

Goods that are in various stages of production within a manufacturing process but are not yet completed products.

FIFO Method

"First-In, First-Out," an accounting method for valuing inventory that assumes the first items purchased or produced are the first ones sold.

Cost Reconciliation

A process of verifying and adjusting the cost of a product or project by comparing budgeted or standard costs to actual incurred costs.