If Leslie Can Produce Two Pairs of Pants in an Hour

question 88

Multiple Choice

If Leslie can produce two pairs of pants in an hour while Eva can make one pair an hour, then it must be the case that:

• A) Leslie has a comparative advantage.
• B) Leslie has an absolute advantage.
• C) Eva has a comparative advantage.
• D) Leslie has both comparative and absolute advantage.

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Definitions:

Capital

Financial assets or the value of financial assets used for the creation of goods or services or for investing.

Pledging

The act of providing an asset as security or collateral for a loan, ensuring the lender can claim the asset if the loan is not repaid.

Receivables

Money owed to a company by its clients or customers for goods or services provided on credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for, considered an asset on the balance sheet.