Table 3-3 -Refer to Table 3-3

question 13

Multiple Choice

Table 3-3
$\begin{array}{|l|c|c|c|c|}\hline&\text { Hours needed to make one unit of: }&&\text { Amount produced in } 2400 \text { hours: }\\\hline & \text { Cars } & \text { Aeroplanes } & \text { Cars } & \text { Aeroplanes } \\\hline \text { US } & 40 & 160 & 60 & 15 \\\hline \text { Europe } & 50 & 150 & 48 & 16 \\\hline\end{array}$
-Refer to Table 3-3.If Europe and the US trade according to the principle of comparative advantage:

• A)all individuals in both countries will gain
• B)both countries can have more aeroplanes and cars
• C)Europe will specialise in cars and the US will specialise in aeroplanes
• D)both countries will consume on their own production possibilities frontier

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Definitions:

Financial Break-Even

The point at which total revenues and total expenses are equal, leading to a net income of zero.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in revenue, indicating the degree to which a firm can increase operating income by increasing sales.

Severe Damage

Refers to extensive physical harm or destruction to property, objects, or systems.

Economy Turn

A term possibly meant to describe a significant change or pivot in the economic conditions or trends.