In One Hour John Can Produce 20 Loaves of Bread

question 211

Multiple Choice

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

• A)Phyllis has an absolute advantage in both goods.
• B)Phyllis has a comparative advantage in producing both cakes and bread.
• C)John has a comparative advantage in producing cakes.
• D)John has an absolute advantage in both goods.
• E)Phyllis has a comparative advantage in producing bread.

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Definitions:

Adjusting Entries

Entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Post-Closing Trial Balance

A listing of all company account balances after end-of-period adjustments and closing entries have been made, used to check the balance of debits and credits.

Adjusted Trial Balance

A listing of all company accounts that will appear on the financial statements after adjustments have been made for errors, accruals, and deferrals.

Ledger

The principal book or computer file for recording and totaling economic transactions by account type, with debit and credit account records validated by a trial balance.