Suppose That Opportunity Costs Are Constant in Both France and Germany

question 71

Multiple Choice

Suppose that opportunity costs are constant in both France and Germany. In France, maximum feasible hourly production levels are either 3 units of wheat or 5 units of wine. In Germany, maximum feasible hourly production levels are either 4 units of wheat or 10 units of wine. It is correct to state that

• A) Germany has an comparative advantage in producing both wheat and wine.
• B) Germany has a comparative advantage in producing wine.
• C) France has a comparative advantage in producing both wheat and wine.
• D) France has a comparative advantage in producing wine.

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Definitions:

Imposter Rule

A rule that holds that if one obtains a negotiable instrument by impersonating another and endorses it with the impersonated party’s signature, the loss falls on the drawer of the instrument.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and simplify transactions across state lines.

Proper Presentment

The correct or formal presentation of a document for acceptance or payment, such as a check.

Accommodation Party

is an individual who signs a negotiable instrument on behalf of another party, guaranteeing payment without receiving personal benefit.