-Refer to Table 3-2

question 36

Multiple Choice

-Refer to Table 3-2. What does each producer have an absolute or comparative advantage in?

• A) The rancher has an absolute advantage in both goods, and the farmer has a comparative advantage in meat.
• B) The rancher has an absolute advantage in meat, and the farmer has a comparative advantage in potatoes.
• C) The rancher has an absolute advantage in meat, and the farmer has a comparative advantage in neither good.
• D) The rancher has an absolute advantage in neither good, and the farmer has a comparative advantage in potatoes.

---

Definitions:

Operating Income

Earnings from a company's core business operations, excluding non-operating income and expenses, taxes, and interest.

Net Cash Inflows

The total amount of cash that a company receives during a given period, minus the total amount of cash outflows.

Payback Period

The length of time required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.

Net Present Value

A calculation used to determine the value of a series of future cash flows discounted back to the present day, often employed in capital budgeting to assess the profitability of an investment.