Question
Country A can produce 10 units of cloth or 5 units of
wine in a day. Country B can produce 6 units of cloth or 4 units of wine in a day. Which country has the comparative advantage in the production of cloth and wine?Solution
Comparative advantage is determined by comparing the opportunity costs of producing goods between countries. Opportunity Cost Calculation:
- Country A:
- Opportunity cost of 1 unit of cloth = 5/10 = 0.5 units of wine
- Opportunity cost of 1 unit of wine = 10/5 = 2 units of cloth
- Country B:
- Opportunity cost of 1 unit of cloth = 4/6 = 0.67 units of wine
- Opportunity cost of 1 unit of wine = 6/4 = 1.5 units of cloth
- Country A:
- Lower opportunity cost in producing cloth (0.5 < 0.67)
- Country B:
- Lower opportunity cost in producing wine (1.5 < 2)
A firm budgeted sales of ₹120 lakh but achieved actual sales of ₹100 lakh. Variable cost was budgeted at 60% of sales, and actual cost was 62% of ac...
The process of recording business transactions in a chronological order is called:
Which of the following is not a type of cash book?
The standard time for a task is 4 hours per unit at a wage rate of ₹60 per hour. In a period, 500 units were produced in 1,900 hours, and the actual w...
Under Ind AS 116, a company leases an asset for 5 years. On transition, it recognizes a right-of-use asset and corresponding lease liability. However, t...
In an organization, profit after interest, tax, and dividend on preference shares is 4,00,000. The number of equity shares is 40,000 and the dividend pa...
A claims processing unit uses a mix of clerks and analysts. Budget: 60% clerks (₹200/hr), 40% analysts (₹500/hr) for 10,000 hours. Actual: 55% clerk...
Time of supply means
Company A sold machinery having a WDV of ₹ 40 lakh to Company B for ₹ 50 lakh (FV ₹ 50 lakh) and the same machinery was leased back by Company B T...
A person can hold directorship in ______ companies simultaneously.
