Table 3-8 Assume That Huang and Min Can Switch Between Producing Parasols

question 380

Multiple Choice

Table 3-8
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
-Refer to Table 3-8. Assume that Huang and Min each has 36 labor hours available. Originally, each person divided his/her time equally between the production of parasols and plates. Now, each person spends all their time producing the good in which they have a comparative advantage. As a result, the total output of plates increased by

• A) 0.
• B) 1.5.
• C) 3.
• D) 9.

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Definitions:

Debits

Financial entries that represent an increase in assets or expenses or a decrease in liabilities, equity, or income on a company's balance sheet or income statement.

Credits

Entries in the accounting system that can decrease assets or increase liabilities and equity on a company’s balance sheet, reflecting the decrease in the company's resources or increase in claims against those resources.

Normal Balance

The side of an account where increases are recorded, which is the debit side for assets and expenses, and the credit side for liabilities, equity, and revenue.

Rent Expense

An expense account that records the cost incurred by a business to utilize property or equipment for operations.