Answer the Question on the Basis of the Following Production

question 369

Multiple Choice

Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina. Refer to the tables. Suppose that resources in North Cantina and South Cantina are identical in quantity and quality. We can conclude that

• A) South Cantina has better technology than North Cantina in producing both capital and consumer goods.
• B) North Cantina has better technology than South Cantina in producing both capital and consumer goods.
• C) North Cantina is growing more rapidly than South Cantina.
• D) North Cantina has better technology than South Cantina in producing consumer goods but not capital goods.

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Definitions:

Depreciation Expense

The allocated expense of a tangible asset over its useful life, representing the asset's reduction in value due to use and wear and tear.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a company's assets over time.

Units-Of-Activity

A depreciation method that allocates the cost of an asset over its useful life based on the number of units it produces or the hours it operates.

Double-Declining-Balance

An accelerated method of depreciation that doubles the standard depreciation rate, resulting in higher depreciation expenses in the earlier years of an asset's life.