Assume That China Has a Comparative Advantage in Producing Corn

question 124

Multiple Choice

Assume that China has a comparative advantage in producing corn and exports corn to Japan.We can conclude that

• A)China also has an absolute advantage in producing corn relative to Japan.
• B)China has a lower opportunity cost of producing corn relative to Japan.
• C)Japan has an absolute disadvantage in producing corn relative to China.
• D)labour costs are higher for corn producers in Japan than in China.

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Definitions:

Work in Process

Inventory that includes the cost of raw materials, labor, and manufacturing overhead for products that are in various stages of production but not yet complete.

Finished Goods

Finished goods that are prepared and available to be bought by customers.

Work in Process Inventory

Inventory that is in the process of being manufactured but is not yet complete.

Direct Materials Inventory

Raw materials that are directly used in the production process and can be easily traced to the finished product.