Exhibit 21-3 Potatoes and Wheat Output (Tons Per Day)

question 200

Multiple Choice

Exhibit 21-3 Potatoes and wheat output (tons per day)

-If each nation in Exhibit 21-3 specializes in producing the good for which it has a comparative advantage,then:

• A) Ireland would produce neither potatoes or wheat.
• B) the United States would produce both potatoes and wheat.
• C) the United States would produce potatoes.
• D) Ireland would produce potatoes.

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Definitions:

Gross Investment

The total amount invested in the purchase of new capital assets plus replacement of depreciated assets, reflecting the total expenditure on new capital in an economy.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time due to wear and tear or obsolescence.

Net Investment

The overall sum invested by a company or an economy in capital assets, with depreciation deducted.

Depreciation

Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life, representing how much of the asset's value has been used up.