Table 3-4 -Refer to the Table.Who Has an Absolute Advantage in the Absolute

question 166

Multiple Choice

Table 3-4

-Refer to the table.Who has an absolute advantage in the production of each good

• A)Alberta has an absolute advantage in birdhouses, and Manitoba has an absolute advantage in baskets.
• B)Alberta has an absolute advantage in baskets, and Manitoba has an absolute advantage in birdhouses.
• C)Alberta has an absolute advantage in neither good, and Manitoba has an absolute advantage in both goods.
• D)Alberta has an absolute advantage in both goods, and Manitoba has an absolute advantage in neither good.

---

Definitions:

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, indicating how a change in sales will affect profits.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Contribution Margin Ratio

The percentage of sales that exceeds variable production costs, indicating how much of each sales dollar is available to cover fixed costs and generate profit.

Variable Expenses

Expenses that vary directly with changes in business activities or production levels, similar to variable costs, including items like shipping fees and sales commissions.