If Destiny can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then
A. Destiny has the absolute advantage in the production of chairs.
B. Greg has the absolute advantage in the production of chairs.
C. Greg has the comparative advantage in the production of chairs.
D. Destiny has the comparative advantage in the production of tables.
Answer: A
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When the supply curve is flat, a tariff on imported goods
a. always increases the welfare of Americans. b. always decreases the welfare of American.. c. has no effect on the welfare of Americans. d. only affects the welfare of Americans if the goods are also made domestically .
Excess capacity exists when a firm produces
A) more than the profit-maximizing level of output. B) less than the quantity that minimizes average total cost. C) less than the quantity that minimizes marginal cost. D) more than the quantity that minimizes marginal cost. E) None of the above answers is correct.
When a firm is producing at the profit maximizing level of out put and P > ATC, the firm is:
A) breaking even. B) incurring an economic loss. C) earning an economic profit. D) earning a profit or incurring a loss depending on the level of total fixed costs.
The sum of all factor payments in the economy yields
a. gross domestic product. b. national income. c. disposable income. d. net domestic product.