If Korea Is Capable of Producing Either Shoes or Soccer

question 108

Multiple Choice

If Korea is capable of producing either shoes or soccer balls or some combination of the two,then

• A)Korea should specialize in the product in which it has an absolute advantage.
• B)it would be impossible for Korea to have an absolute advantage over another country in both products.
• C)it would be difficult for Korea to benefit from trade with another country if Korea is efficient in the production of both goods.
• D)Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

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Definitions:

Units

Units commonly refer to a measure of quantity or to the basic amounts of inventory, production, or other quantifiable elements in business operations.

Return On Capital Employed (ROCE)

A financial ratio that measures a company's profitability and efficiency in using its capital; calculated as EBIT (Earnings Before Interest and Taxes) divided by capital employed.

Capital Structure

The composition of a company's liabilities and shareholders' equity including debt, equity, and any other types of financing.

Tax Bracket

A range of income over which the tax rate is constant.