David Takes 10 Minutes to Process a Customer,and 20 Minutes

question 138

Multiple Choice

David takes 10 minutes to process a customer,and 20 minutes to stock the shelves.Danny takes 15 minutes to process a customer,and 15 minutes to stock the shelves.Which of the following statements is true?

• A) David has an absolute advantage in performing both tasks.
• B) Danny has an absolute advantage in performing both tasks.
• C) David has a comparative advantage in processing customers but not in stocking shelves.
• D) Danny has a comparative advantage in processing customers but not in stocking shelves.
• E) Danny has a comparative advantage in processing customers and in stocking shelves.

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Definitions:

Stated Value

A value assigned to no-par value stock by the issuing company's board of directors to serve as the stock's legal capital.

No-par Stock

Shares issued without a par value listed on the face of the stock certificate, allowing the company more flexibility in setting their value.

Redemption Value

The value at which a bond or other debt security can be redeemed before its maturity by the issuer.

State Of Incorporation

The specific state within the United States where a corporation is registered to conduct business under its laws.