Table 2-13 Table 2-13 Shows the Output Per Day of Day

question 238

Multiple Choice

Table 2-13
Table 2-13 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats.
-For each surfboard that Australia produces, it gives up the opportunity to make 25 boomerangs. New Zealand can produce 1 surfboard for every 15 boomerangs it produces. Which of the following is true about the comparative advantage between the two countries?

• A) Australia has the comparative advantage in surfboards.
• B) Australia has the comparative advantage in boomerangs.
• C) New Zealand has the comparative advantage in surfboards and boomerangs.
• D) New Zealand has the comparative advantage in boomerangs.

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Definitions:

Cash

Liquid assets held by a company or individual, used for transactions or as a reserve for future needs.

Accounts Receivable

Represents the money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Supplies

Materials or items used in the operation of a business or needed in the process of providing a service or making goods.

Accounts Payable

Liabilities owed by a company to its creditors for goods or services that have been delivered or used but not yet paid for.