If Shawn Can Produce More Donuts in One Day Than

question 16

Multiple Choice

If Shawn can produce more donuts in one day than Sue can produce in one day, then

• A) Shawn has a comparative advantage in the production of donuts.
• B) Sue has a comparative advantage in the production of donuts.
• C) Shawn has an absolute advantage in the production of donuts.
• D) Shawn should produce donuts and Sue should spend her time on a different activity.

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Definitions:

Shareholder

An individual or entity that owns one or more shares of stock in a corporation, thus holding a portion of the corporation's ownership and often entitled to a share of the corporation's profits and voting rights.

Domination

The exercise of control or influence over someone or something, or the state of being dominant.

Pseudo-Foreign Corporation

A business entity that operates in a country different from its country of incorporation but is treated as a domestic company for legal or tax purposes.

Foreign Corporation

A corporation that is incorporated in one jurisdiction but is doing business and registered to operate in another jurisdiction.