Use the Following Scenario to Answer the Following Questions

question 32

Multiple Choice

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
-Based on the scenario,which of the following is true?

• A) Karl has both an absolute and a comparative advantage in car production.
• B) Karl has both an absolute and a comparative advantage in truck production.
• C) Karl has neither an absolute nor a comparative advantage in car production.
• D) Karl has neither an absolute nor a comparative advantage in truck production.
• E) Jager has both an absolute and a comparative advantage in truck production.

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Definitions:

FICA Withholding

The process by which employers withhold social security and Medicare taxes from their employees' paychecks, contributing to the FICA taxes owed.

Social Security Limit

The maximum amount of earnings on which Social Security payroll taxes are levied, also affecting the amount that can be received as Social Security benefits.

AGI

Adjusted Gross Income is your gross income minus allowable deductions, used to determine your taxable income on your federal income tax return.

Estimated Taxes

Periodic advance payments of taxes on income that is not subject to withholding, such as earnings from self-employment, interest, dividends, and rental income.