Scenario 20.1 Suppose Labor Productivity Differences Are the Only Determinants of Comparative

question 70

Multiple Choice

Scenario 20.1
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar.
-Refer to Scenario 20.1. Which of the following statements is true?

• A)Brazil has an absolute advantage in producing only coffee.
• B)Brazil has an absolute advantage in producing only sugar.
• C)Chile has an absolute advantage in the production of both coffee and sugar.
• D)Chile has an absolute advantage in producing only coffee.
• E)Brazil has an absolute advantage in the production of both coffee and sugar.

Calculate equity given assets and liabilities.

Understand how transactions impact the accounting equation.

Interpret the impact of stockholder transactions on equity.

Distinguish between different types of transactions and their effects on financial statements.

---

Definitions:

Ethnocentrism

The belief in the superiority of one's own ethnic group, culture, or nation over others.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a generalized view of other cultures.

Low-Context Cultures

Cultures that depend on explicit messages conveyed through the spoken or written word.

High-Context Cultures

Cultures in which meaning is conveyed through body language, nonverbal cues, and the circumstances in which the communication is taking place.