Question 1

If Jeremy has an absolute advantage in cooking and Margaret has an absolute advantage in cleaning, then:

Accepted Answer

Having an absolute advantage in a task does not directly inform us about comparative advantage. Comparative advantage considers the opportunity cost of performing one task over another, which requires more information than just knowing who is absolutely better at a specific task.

Question 2

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria's opportunity cost of typing one page is:

Accepted Answer

Maria's opportunity cost of typing one page is how many loads of laundry she could have done instead of typing one page. To figure this out, we need to calculate Maria's productivity ratio for typing and laundry:

Productivity ratio for typing = 8 pages per hour
Productivity ratio for laundry = 12 loads per hour

Next, we need to compare Maria's productivity ratio for laundry to Hans' productivity ratio for laundry to see how much more productive Maria is at laundry than Hans:

Maria's productivity ratio for laundry / Hans' productivity ratio for laundry = 12 loads per hour / 4 loads per hour = 3

This means that Maria is 3 times more productive at laundry than Hans. If Maria were to spend one hour doing laundry instead of typing, she could do:

3 x 8 pages = 24 pages

This is the opportunity cost of not typing for one hour. To find out Maria's opportunity cost of typing one page, we need to figure out how many loads of laundry she could have done instead of typing one page:

Opportunity cost of typing one page = 1 / (Maria's productivity ratio for laundry / Maria's productivity ratio for typing)
Opportunity cost of typing one page = 1 / (12 loads per hour / 8 pages per hour)
Opportunity cost of typing one page = 8 / 12
Opportunity cost of typing one page = 2 / 3

Therefore, Maria's opportunity cost of typing one page is 2/3 of a load of laundry, which is answer choice (D).

Question 3

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Helen's opportunity cost of baking one cake is:

Accepted Answer

Helen can paint one room in the time it takes her to bake 40 cakes, while Josh can paint one room in the time it takes him to bake 60 cakes. Therefore, Helen's opportunity cost of baking one cake is the amount of paint she could have applied if she had used that time to paint instead of bake.

If Helen had used the time it took her to bake 40 cakes to paint instead, she would have completed painting 1/40 of a room in that time. Therefore, her opportunity cost of baking one cake is painting 1/40 of a room, which is option B.

Question 4

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. In any given amount of time, _____.

Accepted Answer

Maria can do more laundry and type more pages per hour than Hans. Therefore, Maria has an absolute advantage in both doing laundry and typing. Since Maria has an absolute advantage in both tasks, she also has a comparative advantage in both tasks. Therefore, choice B is the correct answer.

Question 5

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans' opportunity cost of typing one page is:

Accepted Answer

Hans' opportunity cost of typing one page is how many loads of laundry he could have done instead of typing that one page. Since Hans can do 4 loads of laundry per hour and type 6 pages per hour, if he spends one hour typing, he could have done 4/6 = 2/3 of a load of laundry instead. Therefore, the answer is D.

Question 6

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria's opportunity cost of doing one load of laundry is:

Accepted Answer

Maria's opportunity cost of doing one load of laundry is the number of pages she could have typed in the time it takes her to do one load of laundry. 
Maria can do 12 loads of laundry per hour, so it takes her 1/12 of an hour (or 5 minutes) to do one load of laundry. 
In that same amount of time, she could have typed 8/12 of a page (since she can type 8 pages per hour). Simplifying, that is equal to 2/3 of a page. 
So Maria's opportunity cost of doing one load of laundry is 2/3 of a page.

Question 7

If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria, then:

Accepted Answer

Absolute advantage refers to the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group. However, comparative advantage is about who can perform the activity at a lower opportunity cost. Having an absolute advantage in both activities does not automatically determine comparative advantage, as comparative advantage depends on the relative opportunity costs of the activities between Evan and Gloria.

Question 8

If Monica has a comparative advantage in baking and George has a comparative advantage in sewing, then:

Accepted Answer

Comparative advantage only looks at the opportunity cost of producing one good versus another. It is possible for both Monica and George to have a higher opportunity cost in producing the other good, meaning they both have a comparative advantage in their respective industries, with no absolute advantage for either.

Question 9

Eileen has a comparative advantage over Jan in piano tuning, but not shoe polishing. Therefore, _____.

Accepted Answer

Comparative advantage means that one person can produce a good or service at a lower opportunity cost than another person. In this case, Eileen has a lower opportunity cost of piano tuning than Jan, but not of shoe polishing. This means that Jan could potentially still have an absolute advantage in piano tuning (producing more units of output in a given amount of time), but that Eileen can produce piano tuning with a lower opportunity cost. The information given does not provide enough information to determine whether Eileen must have an absolute advantage in shoe polishing, and therefore option B and option D can be ruled out. Therefore, the correct answer is C - Jan must have a lower opportunity cost of shoe polishing (since Eileen does not have a comparative advantage in this area).

Question 10

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans' opportunity cost of doing one load of laundry is:

Accepted Answer

Hans' opportunity cost of doing one load of laundry is the amount of typing he foregoes to do that laundry. Since he can type 6 pages per hour and do 4 loads of laundry per hour, for each load of laundry, he gives up 6/4 = 1.5 pages.

Question 11

If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then:

Accepted Answer

The answer of If Daniel produces one pair of shoes...

Question 12

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans and Maria would both be better off if:

Accepted Answer

Hans has a comparative advantage in typing (6 pages per hour vs. Maria's 8, a smaller gap than in laundry), and Maria has a comparative advantage in doing laundry (12 loads per hour vs. Hans's 4). Specializing and trading based on these advantages would make both better off.

Question 13

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Josh's opportunity cost of baking one cake is:

Accepted Answer

Josh can paint one room in the time it takes him to bake 60 cakes, so his opportunity cost of baking one cake is painting 1/60 of a room.

Question 14

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?

Accepted Answer

The answer of Janis mows the lawn in 1 hour...

Question 15

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then:

Accepted Answer

Even if Robin has an absolute advantage in both activities, comparative advantage determines the potential for mutual gains from trade. The statement lacks information on their relative efficiencies or opportunity costs in each activity, which are crucial for determining who should specialize in what for trade to be beneficial.

Question 16

If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?

Accepted Answer

The answer of If Jason can wash a car in...

Question 17

If one person has an absolute advantage in producing both of two goods, then that person:

Accepted Answer

Having an absolute advantage in producing both goods does not necessarily mean having a comparative advantage in both. Comparative advantage is about who can produce a good at a lower opportunity cost, not necessarily at a higher volume or speed. Therefore, even if one person has an absolute advantage in both goods, they will have a comparative advantage in only one of the goods, based on opportunity costs. This is the basis for beneficial trade, as each party specializes in the production of goods for which they hold a comparative advantage.

Question 18

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true?

Accepted Answer

The opportunity cost of baking cakes is lower for Josh because he can paint a room in less time than it takes him to bake 60 cakes, while for Helen it takes her less time to paint a room than bake 40 cakes. Therefore, Josh has a lower opportunity cost of baking cakes than Helen. None of the other answer choices are supported by the information provided.

Question 19

A country has an absolute advantage in the production of a good if that country:

Accepted Answer

Absolute advantage refers to a country's ability to produce a certain good using fewer resources than another country would require. Therefore, option A is the correct answer. Option B refers to comparative advantage, which is a different concept. Option C is incorrect because the country's ability to produce the good with the fewest resources is directly related to its opportunity cost. Option D is the opposite of the correct answer, as a country with the greatest opportunity cost would have a disadvantage in producing the good. Option E combines both absolute advantage and comparative advantage, which is not necessary for the definition of absolute advantage.

Question 20

If Sam can chop up more carrots per minute than Joe can, then:

Accepted Answer

Sam has an absolute advantage in carrot chopping because he can chop more carrots per minute than Joe can. Absolute advantage refers to the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group.

Quiz 2: Some Tools of Economic Analysis