John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
a. Harry has a comparative advantage in ironing.
b. Harry has a comparative advantage in typing.
c. Harry has an absolute advantage in typing.
d. Harry has an absolute advantage in ironing.
e. Neither can gain from specialization and exchange.
A
You might also like to view...
Vertical contracts between manufacturers and retailers often aim to
a. Prevent the manufacturer from upstream price discrimination b. Reward the retailer for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the retailer's belief of the likely success of his product d. All of the above
One policy the government can use to remedy the effects of pollution caused by the production of a good is to
a. lower the price of the good b. create positive externalities to compensate for the negative ones c. levy a tax on each unit of the good produced d. create free riders e. increase the production of the polluting good
Refer to the accompanying figure. If Pat and Chris each spend half their time on each task, then:
A. they will plant more bulbs and remove fewer bags of trash than if they had each specialized in the task at which they have a comparative advantage. B. the outcome will be efficient. C. the outcome will be unattainable. D. they will plant fewer bulbs and remove fewer bags of trash than if they each had specialized in the task at which they have a comparative advantage.
If the percentage change in price is 10%, and the percentage change in quantity supplied is 0%, then the supply for the good is
A. elastic. B. perfectly inelastic. C. inelastic. D. unit elastic.