Use the Figure Below to Answer the Following Questions

question 73

Multiple Choice

Use the figure below to answer the following questions.
Table 2.4.1
The planets of Vulcan and Romulus each produce goods X and Y.
The following table gives points on their production possibilities frontiers.

-Refer to Table 2.4.1. Which one of the following is true?

• A)Romulus has both an absolute advantage and a comparative advantage in the production of Y.
• B)Romulus has both an absolute advantage and a comparative advantage in the production of X.
• C)Vulcan has a comparative advantage in the production of X.
• D)Romulus has a comparative advantage in the production of X.
• E)Vulcan should specialize in the production of X.

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Definitions:

Raw Material

The basic substance in its natural, modified, or semi-processed state, used as an input to a production process for manufacturing.

Closing Inventory

The quantity and value of stock on hand at the end of an accounting period.

Direct Material

Raw materials that can be directly attributed to the production of goods.

Finished Products

Goods that have completed the manufacturing process and are ready for sale.