Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?
A. Dan has the comparative and absolute advantage in sandwiches.
B. Dan has the comparative and absolute advantage in smoothies.
C. Dan has the comparative advantage in smoothies, but Tracy has the absolute advantage in smoothies.
D. Dan has the comparative advantage in sandwiches, but Tracy has the absolute advantage in sandwiches.
Answer: A
You might also like to view...
Reducing ________ unemployment may be beneficial for an economy, but reducing ________ unemployment to zero would definitely reduce the efficiency of the economy
A) structural and frictional; cyclical B) frictional and cyclical; structural C) the natural rate of; cyclical D) structural and cyclical; frictional
The working poor are likely to be found in just a few broad occupational categories
Indicate whether the statement is true or false
The current account in the BOP records:
a. all money flowing between countries. b. a nation's yearly exports and imports of goods and services. c. only the transactions involving capital goods in international trade. d. only the transactions involving consumer goods in international trade. e. only those goods and services purchased on credit in international transactions.
Most economists believe that there are positive externalities in education. One can conclude that a free market would fail to give the socially optimal outcome because the equilibrium:
A. price and quantity would be too high. B. price would be too low and quantity would be too high. C. price and quantity would be too low. D. price would be too high and quantity would be too low.