Suppose That a Worker in Country a Can Make Either

question 127

Multiple Choice

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.The workers in Country B will benefit from trade if they:

• A) specialize in bananas because they have a comparative advantage in banana production.
• B) specialize in tomatoes because their opportunity cost of tomatoes is higher than Country A's.
• C) specialize in tomatoes because their opportunity cost of tomatoes is lower than Country A's.
• D) specialize in bananas because they have an absolute advantage in banana production.

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Definitions:

Adjusting Entries

Final journal recordings at the close of an accounting spell to assign revenues and expenditures to the factual period of occurrence.

Supplies

Materials and goods used in the operation of a business, often consumable and regularly replaced.

Prepaid Insurance

An asset account that represents insurance payments made in advance for coverage that extends over a future period.

Depreciation Expense

The orderly apportioning of the expense of a concrete asset over its expected lifetime, illustrating its decline in value as time progresses.