If Daniel Produces One Pair of Shoes in 4 Hours

question 178

Multiple Choice

If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then

• A)Sarah has a comparative advantage in shoemaking
• B)Daniel has a comparative advantage in shoemaking
• C)Sarah has an absolute and a comparative advantage in shoemaking
• D)Daniel has an absolute and a comparative advantage in shoemaking
• E)Sarah has an absolute advantage in shoemaking

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Definitions:

Contractual Agreement

A legally binding agreement between two or more parties, typically involving the exchange of goods, services, money, or promises.

Financial Statements

Formal records of the financial activities and condition of a business, entity, or individual, including balance sheet, income statement, and cash flow statement.

Acquisition Differential

The gap between what a company is bought for and the net market value of its recognizable assets and liabilities.

Joint Venture

A business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance.