Suppose Aharoni and Kalinga Are the Only Two Countries in the World

question 68

Multiple Choice

Suppose Aharoni and Kalinga are the only two countries in the world and they produce computers and shoes. Aharoni has 100 workers, and Kalinga has 200 workers. The table below shows the per-day production possibilities for each country. Aharoni has: ​
Table 19.1:

• A)an absolute advantage in computers only.
• B)an absolute advantage in shoes only.
• C)a comparative advantage in computers.
• D)a comparative advantage in shoes.
• E)neither absolute advantage nor comparative advantage in computers.

---

Definitions:

Amortized

The process of spreading out a loan into a series of fixed payments over time, which covers both the principal and the interest.

Compounded Monthly

Interest calculation strategy where interest is added to the principal sum every month, allowing the investment to grow at a faster pace.

Amortized

The process of gradually paying off debt through a series of fixed payments that include both interest and a portion of the principal.

Compounded Monthly

Refers to the process where interest is calculated and added to the principal sum every month, resulting in interest earning interest.