Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 3, Problem 5MCQ
To determine
(a)
Best Alternative.
To determine
(b)
Best Alternative.
To determine
(c)
Best Alternative.
To determine
(d)
Best Alternative
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Mary makes 10 pies and 20 cakes a day and her opportunity cost of producing a cake is 2 pies.
Tim makes 20 pies and 10 cakes a day and his opportunity cost of producing a cake is 4 pies.
If Mary and Tim specialize in the good in which they have a comparative advantage,
A. Mary produces only cakes while Tim produces only pies
B. Mary produces only pies
C. Tim produces both pies and cakes
D. Tim produces only cakes while Mary produces only pies
Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?
a.
Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats.
b.
Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.
c.
Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks.
d.
Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.
Debra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies in 4 hours.c. If both Debra and Sam concentrate on producing only the product in which they havea comparative advantage, how many cakes and how many cookies will they produce?
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Foundations of Economics (8th Edition)
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