Janis mows the lawn in 1 hour and types a paper in 1 hour. Kristen mows the lawn in 2 hours and types a paper in 1 hour. Which of the following statements is true?
a. Kristen has an absolute advantage in typing and a comparative advantage in mowing.
b. Janis has an absolute advantage in both activities and a comparative advantage in typing.
c. Janis has an absolute advantage in both activities and a comparative advantage in mowing.
d. The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis.
e. Neither Janis nor Kristen would gain from specialization.
D
You might also like to view...
If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent, then the demand for the rye bread is ________ and the bakery's total revenue ________
A) unit elastic; does not change B) unit elastic; increases C) unit elastic; decreases D) elastic; does not change E) inelastic; does not change
If there is a basic surplus but a positive total deficit, then
A) interest cost > basic surplus. B) interest cost < basic surplus. C) interest cost > positive total deficit. D) interest cost < positive total deficit.
A second-price auction
a. is also called a Vickrey auction b. is conducted by bidders submitting a single sealed bid c. is where the highest bidder wins and pays the amount of the next highest bid d. all of the above
Inflation is problematic if
a. it is less than the percentage increase in nominal income. b. it is less than the nominal return on saving. c. it equals the growth rate of real GDP in the long run. d. it distorts relative prices, causing a misallocation of resources.