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german
4 years ago
15

If Colombia spends 2 hours producing coffee and 6 hours producing oranges, and Cuba spends 3 hours producing coffee and 1 hour p

roducing oranges, which of the following are true?
Select the correct answer below:_________.
A. Colombia has an absolute advantage producing oranges, and Cuba has an absolute advantage producing coffee.
B. Colombia does not have an absolute advantage producing any goods, but Cuba has an absolute advantage producing oranges.
C. Colombia has an absolute advantage producing coffee, and Cuba has an absolute advantage producing oranges.
D. Colombia has an absolute advantage producing coffee, but Cuba does not have an absolute advantage producing any good.
Business
1 answer:
zimovet [89]4 years ago
8 0

Answer: C. Colombia has an absolute advantage producing coffee, and Cuba has an absolute advantage producing oranges

Explanation:

From the question, we are informed that Colombia spends 2 hours producing coffee and 6 hours producing oranges, and Cuba spends 3 hours producing coffee and 1 hour producing oranges.

Since Columbia spends a lesser time producing coffee and Cuba spends a lesser time producing oranges, it means that Colombia has an absolute advantage producing coffee, and Cuba has an absolute advantage producing oranges.

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Net operating income is a calculation of revenues less cost, minus all reasonably necessary operating expenses. Having said that we can determine that the fixed expenses are included in the necessary operanting expenses unless they include depreciations and amortization. Since the text doesn’t refer to the fixed expenses as depreciations or amortization the calculation is this:

Calculate the cost if the contribution margin is 12%

Cost is equal to = (Revenue*(1-contribution ratio))= (738.000*(1-0.12))= 649.440

Then calculate the net operating income  

Net operating income = (Revenue – Cost-operating expenses) = (738.000-649.440-84.000) = 4.560

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