Use the Following Scenario to Answer the Following Questions

question 93

Multiple Choice

Use the following scenario to answer the following questions:
Raven and Drew produce baseballs and golf balls.Raven can produce six baseballs per hour or four golf balls per hour.Drew can produce three baseballs per hour or one golf ball per hour.
-Based on the scenario,Raven has

• A) an absolute advantage in producing baseballs,but not golf balls.
• B) an absolute advantage in producing golf balls,but not baseballs.
• C) an absolute advantage in producing both goods.
• D) an absolute advantage in producing neither good.
• E) no comparative advantage.

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Definitions:

Current Ratio

A financial metric assessing a firm's capacity to settle short-term debts using its existing assets.

Liquidity Ratios

Liquidity ratios are financial metrics used to assess a company's ability to meet its short-term obligations by comparing its liquid assets to its current liabilities.

Equity Multiplier

A financial ratio that measures a company's total assets financed by shareholders' equity, indicating the level of leverage used by the company.

Inventory Turnover Ratio

A measure of how frequently a company sells and replaces its stock of goods in a given period.