In One Hour John Can Produce 20 Loaves of Bread

question 230

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

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Definitions:

Revenue Recognition

The accounting principle that governs the conditions under which revenue is recognized in the financial statements, ensuring it is recorded when earned.

Payment

It is the transfer of money or goods from one party to another as a settlement of an obligation.

Adjusted

Modified or changed in order to correct or improve the financials, often used in the context of financial statements to present a particular item in a way that reflects its true economic impact.

Financial Statements

Formal records that outline the financial activities and position of a business, individual, or other entity.