Suppose That,given the Same Number of Workers,the United States Can

question 108

Multiple Choice

Suppose that,given the same number of workers,the United States can produce two times as many TVs or 20 times as many potatoes as Chile.Which of the following statements is true?

• A) Chile should trade with the United States for potatoes because the United States has an absolute advantage in the production of potatoes.
• B) Chile should trade with the United States for TVs because the United States has an absolute advantage in the production of potatoes.
• C) The United States can benefit from trading TVs but not potatoes with Chile.
• D) The United States has absolute advantage in producing both goods.

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Definitions:

Return On Stockholders' Equity

A measure of the profitability of a corporation in relation to stockholders' equity, indicating how efficiently a company uses its equity to generate profits.

Return On Common Stockholders' Equity

A financial ratio that measures the profitability of a company from the perspective of common stockholders, calculating how much net income is generated per dollar of common equity.

Common Stock Price

The current price at which a company's shares are being bought and sold on the stock market.

Other Comprehensive Income

Revenues, expenses, gains, and losses that have not been realized and are not included in net income, affecting shareholder equity.