Table 2-9 Table 2-9 Shows the Number of Labor Hours Required to of Labor

question 153

Multiple Choice

Table 2-9

Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras.
-Refer to Table 2-9.Does either Guatemala or Honduras have an absolute advantage and if so, in what product?

• A)Guatemala only has an absolute advantage in producing canoes.
• B)Honduras only has an absolute advantage in producing canoes.
• C)Guatemala has an absolute advantage in producing both products.
• D)Honduras only has an absolute advantage in producing sailboats.

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Definitions:

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash accounts to calculate operating cash flow.

Net Income

A company's overall income after deducting all expenses and taxation from gross revenue.

Accumulated Depreciation

The total depreciation amount that has been charged to expense a fixed asset over its useful life to reflect wear and tear, aging, or obsolescence.

Operating Activities

Day-to-day actions and transactions that are central to the primary business operations, including revenue and expense activities.