Use the Table Below,which Outlines the Production Possibilities of Qatar

question 139

Multiple Choice

Use the table below,which outlines the production possibilities of Qatar and Botswana in wine and wheat,to answer the following question.

The law of comparative advantage suggests that

• A)neither country would gain from trade,even if the costs for transporting the products were zero.
• B)Qatar would not gain from trade because it has an absolute advantage in producing both goods.
• C)both countries would gain if Botswana traded wine made in Botswana for Qatar's wheat.
• D)both countries would gain if Botswana traded wheat grown in Botswana for Qatar's wine.

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Definitions:

Annual Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business over a year.

Investment Costing

The process of determining the total costs associated with making an investment.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a specific product.

Variable Manufacturing Overhead

Costs of manufacturing that vary directly with the level of production, such as raw materials or labor costs.