Comparative and Absolute Advantage — Quiz

Question 1

True or False? Higher opportunity costs equal a greater comparative advantage.

Revolt · Accepted Answer

False

Question 2

Which describes a way in which consumers most likely benefit from producers’ absolute advantage?

Revolt · Accepted Answer

Prices decrease as a result of increased production efficiencies.

Question 3

Which best describes how producers benefit from specialization?

Revolt · Accepted Answer

Producers can increase their profits.

Question 4

Which most likely results from producers engaging in specialization?

Revolt · Accepted Answer

Producers reduce their costs.

Question 5

What can a producer gain by specializing?

Revolt · Accepted Answer

absolute advantage

Question 6

Which best describes how consumers may benefit from specialization?

Revolt · Accepted Answer

Consumers find products at lower prices.

Question 7

Which scenario is the best example of an opportunity cost?

Revolt · Accepted Answer

A computer company produces fewer laptops to meet tablet demand.

Question 8

Which of these best describes an opportunity cost?

Revolt · Accepted Answer

a trade-off

Question 9

When discussing comparative and absolute advantage, which best describes specialization?

Revolt · Accepted Answer

developing expertise in certain types of production

Question 10

A producer with a comparative advantage has the ability to produce a good or service at

Revolt · Accepted Answer

a lower opportunity cost than any competitor can.

Comparative and Absolute Advantage — Quiz Answers