Consider the Following Table on Labor Hours Needed Per Unit

question 68

Multiple Choice

Consider the following table on labor hours needed per unit of output:

Ignoring nonlabor inputs,which of the following statements is correct?

• A)All of the following are correct.
• B)The opportunity cost of a computer equals 1/4 unit of wine in Italy.
• C)The opportunity cost of a computer equals 1/2 unit of wine in France.
• D)Italy has a comparative advantage in computers.
• E)Italy has a comparative advantage in wine.

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Definitions:

Income Statement

A financial report that shows a company's revenues, expenses, and net income or loss over a specific period.

Functional Currency

The currency of the primary economic environment in which an entity operates, typically used to record its financial transactions.

Consolidated Balance Sheet

A financial statement that aggregates the assets, liabilities, and equity of a parent company and its subsidiaries.

U.S. Dollars

The official currency of the United States, often symbolized as $.