If Abigail can produce 4 wireless earbuds or 3 smartphones in a day, while Jacob can produce 1 wireless earbud or 2 smart phones, then it is correct to state that
A. Jacob has an absolute advantage in smartphones.
B. Abigail has a comparative advantage in producing smartphones.
C. Abigail has an absolute advantage in producing wireless earbuds but not smartphones.
D. Jacob has a comparative advantage in smartphones.
Answer: D
You might also like to view...
The expectation of higher prices in the near future will lead to a(n) _________ in supply at the present time.
Fill in the blank(s) with the appropriate word(s).
If Armenia can produce rugs more efficiently than any other country, it does not necessarily benefit from producing rugs for international trade
a. True b. False
Short-run movements along the Phillips curve
a. remind us of the dangers of confusing various types of unemployment b. may determine long-run shifts of the same curve c. are usually brief and dramatic d. respond to different assumptions about consumer confidence e. lead to long-run movements along the same curve
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. recessionary gaps. C. exogenous spending. D. expansionary gaps.