Don can produce 10 pens or 20 pencils in one hour, while Bob can produce 5 pencils or 15 pens in one hour. Which of the following statements is correct?
A) Bob has an absolute advantage in the production of pencils.
B) Bob has an absolute advantage in the production of pens.
C) Bob has a comparative advantage in the production of pencils.
D) Don has a comparative advantage in the production of pens.
E) Don does not have a comparative advantage in the production of either good.
Correct Answer:
Verified
Q36: Table 2.1 Q37: The ability to make something using fewer Q38: A sunk cost _ Q39: Sunk costs _ Q40: When deciding how to divide up tasks, Q42: Comparative advantage refers to _ Q43: If one person has an absolute advantage Q44: Hans can do 4 loads of laundry Q45: The law of comparative advantage states that Q46: Janis mows a lawn in 1 hour
A) can only be
A) can only be measured
A) the ability
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