The Table Below Shows Units of Wheat and Cloth Produced

question 56

Multiple Choice

The table below shows units of wheat and cloth produced by each worker per day in both the countries. Table 20.1 Refer to Table 20.1.Which of the following assumptions holds true for the example?

• A)The goods are produced by using different factors of production
• B)Labor productivity alone determines the comparative advantage
• C)Each of the countries will produce and export wheat and cloth
• D)Both the countries have identical factor endowments
• E)The taste and preference of the consumers are dissimilar in the two countries

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Definitions:

Rate Of Return

The fiscal benefit or detriment arising from an investment over a certain period, computed as a percentage of the initial cost of the investment.

Annual Percentage Rate

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Quoted Loan Rates

The interest rates that lenders provide to potential borrowers when quoting the costs of a loan.