An Automobile Company Has Two Factories, One in Vietnam and One

question 44

Multiple Choice

An automobile company has two factories, one in Vietnam and one in Australia, each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 100 engines or 75 transmission per day.

• A)The Vietnamese factory has an absolute advantage producing both engines and transmissions.
• B)The Australian factory has an absolute advantage in the production of transmissions.
• C)The Vietnamese factory has a comparative advantage in the production of transmissions.
• D)Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies.

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Definitions:

Derailed Negotiation

A negotiation that goes off course, leading to a failure in reaching an agreement or resolving a conflict.

Integrative Negotiation

A negotiation strategy focused on collaborative problem-solving, where parties aim to find a win-win solution that optimally satisfies the interests of all involved.

Conflict-reduction Strategies

Methods or techniques applied to decrease the level of disagreement or discord in a situation.

Reinforcing Tension

Strengthening or emphasizing the strain or stress within a given situation, relationship, or system, potentially leading to escalated conflicts or breakdowns.