Use the Table Below to Answer the Following Question

question 168

Multiple Choice

Use the table below to answer the following question.The table outlines the production possibilities of Slavia and Italia for food and clothing.

The law of comparative advantage suggests that

• A)neither country could gain from trade,even if the costs of transporting the products were zero.
• B)Italia could not gain from trade because it has an absolute advantage in producing both goods.
• C)both countries could gain if Italia traded food for clothing produced in Slavia.
• D)both countries could gain if Slavia traded food for clothing produced in Italia.

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Definitions:

Liability Account

A type of financial account which represents a company's legal debts or obligations that arise during the course of business operations.

Expense Account

An account used in accounting to track expenditures related to the operation of a business, including costs for goods, services, and operational activities.

Adjusting Journal Entries

Entries in accounting made during the close of a financial period, aiming to accurately allocate profits and expenditures to their respective periods of occurrence.

Net Income

A company's overall earnings following the deduction of all expenses and taxes from its total revenue.