The Domestic Opportunity Cost of Producing 100 Barrels of Chemicals

question 113

Multiple Choice

The domestic opportunity cost of producing 100 barrels of chemicals in Germany is one ton of steel. In France, the domestic opportunity cost of producing 100 barrels of chemicals is two tons of steel.
In this case,

• A) France has a comparative advantage in the production of chemicals.
• B) Germany has a comparative advantage in the production of chemicals.
• C) France has an absolute advantage in the production of chemicals.
• D) Germany has an absolute advantage in the production of chemicals.

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Definitions:

Forecasting Errors

The difference between actual outcomes and previously predicted values, typically observed in the context of demand forecasting or financial forecasts.

Safety Inventory

Extra inventory held to guard against uncertainties in demand or supply, ensuring product availability.

Advanced Planning Systems

Integrated software systems designed to optimize production planning, scheduling, inventory control, and supply chain management.

Data Accuracy

The degree to which data correctly reflects the real-world values it is intended to represent.