Use the Following Scenario to Answer the Next Eight Questions

question 85

Multiple Choice

Use the following scenario to answer the next eight questions:
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
-Based on the scenario,which of the following is true?

• A) Rosa has an absolute advantage in producing basketballs but not footballs.
• B) Rosa has an absolute advantage in producing footballs but not basketballs.
• C) Rosa has an absolute advantage in producing both goods.
• D) Rosa has an absolute advantage in producing neither good.
• E) Rosa does not have any comparative advantage.

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Definitions:

Surviving LLC

A term used to describe a limited liability company that continues to exist after a merger or consolidation, absorbing the assets and liabilities of the other entity.

LLC

Limited Liability Company; a business structure in the United States that protects its owners from personal responsibility for its debts or liabilities.

Share Profits

The division of net profits among the shareholders or partners of an organization.

Losses

Financial reductions or negative outcomes typically resulting from expenses surpassing revenues or due to the decrease in value of an asset.