If Japan Could Produce More Steel in a Year Than

question 77

Multiple Choice

If Japan could produce more steel in a year than the United States using the same amount of resources,then

• A) Japan must have an absolute advantage in producing steel
• B) the United States must have a comparative advantage in producing steel
• C) Japan must have a comparative advantage in producing steel
• D) neither the United States nor Japan will have a comparative advantage in producing steel
• E) there would be no gains from specialization

---

Definitions:

Revaluation Gain

An increase in the value of an asset over its previously recorded book value, recognized after a revaluation process.

Relevant Exchange Rates

The currency rates used to convert transactions involving foreign currencies into the reporting currency for financial reporting purposes.

Fair Value

The price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Cash Consideration

The total amount of cash that is paid or received during a transaction, such as buying an asset or settling a liability.