Use the Following Scenario to Answer the Next Four Questions

question 64

Multiple Choice

Use the following scenario to answer the next four questions:
RayRay and Andrew produce baseballs and golf balls. RayRay can produce six baseballs per hour or four golf balls per hour. Andrew can produce three baseballs per hour or one golf ball per hour.
-Based on the scenario,which of the following is true?

• A) Andrew has an absolute advantage in producing baseballs but not golf balls.
• B) Andrew has an absolute advantage in producing golf balls but not baseballs.
• C) Andrew has an absolute advantage in producing both goods.
• D) Andrew has an absolute advantage in producing neither good.
• E) RayRay has a comparative advantage in producing both goods.

---

Definitions:

Interest Earned

The income received from an investment, usually expressed as an annual percentage of the principle.

Callable Bonds

Bonds that have a provision that the issuer can repurchase, or call in, the bonds at specified dates if the board of directors authorizes the retirement (payoff) of the bonds before their maturity date.

Interest Rates

The cost of borrowing money, expressed as a percentage of the amount borrowed.

Maturity Date

The final day of a note on which the borrower (the maker of the note) pays the face value and any interest due to the holder of the note. The due date.