-Refer to Above Table to Answer This Question

question 28

Multiple Choice

-Refer to above table to answer this question.Supposing that there are 200 workers each in Rings and Potter.If,originally,half the workers were employed in each industry,what would be the gains from trade if the countries completely specialized in the products in which they have a comparative advantage?

• A)+200 broomsticks;-100 swords.
• B)+200 broomsticks;+100 swords.
• C)+500 broomsticks;+100 swords.
• D)+700 broomsticks;+700 swords.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Business Combination Valuation Entries

Accounting entries made to reflect the fair market values of assets acquired and liabilities assumed in a business combination.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, recognizing the decrease in value of the asset over time.

Inventory Account

An account on a company’s balance sheet that represents the value of the goods that are ready for sale but have not yet been sold.