Assume That China Has a Comparative Advantage in Producing Corn

question 236

Multiple Choice

Assume that China has a comparative advantage in producing corn and exports corn to Japan. We can conclude that

• A) China also has an absolute advantage in producing corn relative to Japan.
• B) China has a lower opportunity cost of producing corn relative to Japan.
• C) Japan has an absolute disadvantage in producing corn relative to China.
• D) Labor costs are higher for corn producers in Japan than in China.

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Definitions:

Cash Sales

Transactions where payment is made immediately in cash at the time of sale.

Cash Payments Journal

A ledger book or digital record maintaining details of all cash payments made by a business.

Accounting Information System

A system of collecting, storing, and processing financial and accounting data that is used by decision-makers.

Cost Awareness

The consideration and understanding of the costs associated with conducting business and the impact on financial performance.