Scenario: a Shoe Manufacturer Has Factories in Two Countries, Country

question 132

Multiple Choice

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

-Refer to the scenario above.Which of the following statements is true in this case?

• A) The opportunity cost of designing shoes is lower in Country X.
• B) The opportunity cost of stitching shoes is lower in Country X.
• C) Country Y has an absolute advantage in stitching shoes.
• D) Country Y has an absolute advantage in designing shoes.

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Definitions:

Compensable Damages

Damages that a plaintiff can recover in a lawsuit, representing monetary compensation for loss or injury.

Punitive Damages

Monetary compensation awarded to a plaintiff, above and beyond actual damages, to punish the defendant for egregious conduct.

Wealthy Defendant

A term not typically used in a specific legal context, but generally refers to a defendant in a legal action who has significant financial resources.

Wrongful Conduct

Actions or behaviors by an individual or entity that are illegal or morally inappropriate.