Suppose That a Worker in Agland Can Produce Either 10

question 38

Multiple Choice

Suppose that a worker in Agland can produce either 10 units of organic grain or 2 units of incense per year,and a worker in Zenland can produce either 5 units of organic grain or 15 units of incense per year.There are 20 workers in Agland and 10 workers in Zenland.Currently the two countries do not trade.Agland produces and consumes 100 units of grain and 20 units of incense per year.Zenland produces and consumes 50 units of grain and no incense per year.If each country made the decision to specialize in producing the good in which it has a comparative advantage,then the combined yearly output of the two countries would increase by

• A)30 units of grain and 100 units of incense.
• B)30 units of grain and 150 units of incense.
• C)50 units of grain and 90 units of incense.
• D)50 units of grain and 130 units of incense.

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Definitions:

Remaining Economic Life

The estimated remaining period during which an asset is expected to be economically usable, with its cost being recoverable.

International Accounting Standards

A set of accounting standards, issued by the International Accounting Standards Board (IASB), that aim to standardize accounting practices across the globe.

R&D Costs

Expenses associated with research and development activities, aimed at discovering new knowledge or innovations that could lead to new products or improvements in existing ones.

Capitalized

Recorded as an asset rather than an expense, spreading the cost over time through depreciation or amortization.