SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE

question 127

Multiple Choice

SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE
Poland requires 4 hours of labor to produce a ton of coal and 10 hours of
Labor to produce 10 bushels of wheat.The Czech Republic requires 6
Hours of labor to produce a ton of coal and 10 hours of labor to produce
10 bushels of wheat.
Reference: Ref 2­5
(Scenario: Absolute and Comparative Advantage) What is the
Opportunity cost of coal in Poland?

• A)0.25 hour of labor/ton of coal
• B)2.5 bushels of wheat/ton of coal
• C)4 hours of labor/ton of coal
• D)0.4 bushels of wheat/ton of coal

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Definitions:

Turnover

The rate at which inventory or assets of a business are replaced during a given period, often used as a measure of sales or operational efficiency.

Return on Investment

A financial metric used to calculate the profitability of an investment, measuring the gain or loss generated on an investment relative to the amount of money invested.

Investment Opportunity

A chance to use money with the expectation of achieving a return greater than the initial outlay.

Required Rate of Return

The minimum expected rate of return on an investment that makes it acceptable to an investor, based on the investment's risk level.