In Which of the Following Situations Describing the Coffee-Versus-Computer Production

question 43

Multiple Choice

In which of the following situations describing the coffee-versus-computer production possibilities potential does country A have a comparative advantage in coffee? Country A: 1,000 bushels of coffee or 10 computers; country B:

• A) 500 bushels of coffee or 5 computers.
• B) 1,200 bushels of coffee or 12 computers.
• C) 1,500 bushels of coffee or 12 computers.
• D) 1,300 bushels of coffee or 15 computers.
• E) 1,600 bushels of coffee or 15 computers.

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Definitions:

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process.

Parent Entity

A company that has control over one or more subsidiaries.

Company Tax Rate

The rate at which a company’s taxable income is taxed by the government, which varies by country and sometimes also by the type and size of the company.

Inventories

Goods owned with the intention to sell them through standard business activities, in the stage of being made for sale, or as parts or materials meant for consumption in production activities or while offering services.