Comparative and Absolute Advantage

Question 1

This table shows the production possibility schedule for several toothpaste companies. Toothpaste company Large tubes Small tubes 1 Sparkling 100 per hour 200 per hour 2 Bright White 100 per hour 250 per hour 3 Fresh! 200 per hour 250 per hour 4 Mmmint 150 per hour 150 per hour Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste.

Revolt · Accepted Answer

2, 1, 3, 4

Question 2

This table shows the cost of producing ice cream for several manufacturers.Manufacturer Amount Produced CostThe Dairy 100 gallons $10 Ice Cream, Inc. 100 gallons $15 Frozen Treats 150 gallons $12 Bob & Gary’s 125 gallons $15 Which manufacturer has the absolute advantage?

Revolt · Accepted Answer

Frozen Treats

Question 3

Which calculation helps determine which producer has the absolute advantage?

Revolt · Accepted Answer

Amount produced divided by resources used

Question 4

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

Revolt · Accepted Answer

limiting the types of goods and services produced

Question 5

What can a producer gain by specializing?

Revolt · Accepted Answer

absolute advantage

Question 6

higherlowermultiple

Revolt · Accepted Answer

lower

Question 7

Which best describes how producers benefit from specialization?

Revolt · Accepted Answer

Producers can increase their profits.

Question 8

Which scenario is the best example of an opportunity cost?

Revolt · Accepted Answer

A computer company produces fewer laptops to meet tablet demand.

Question 9

Which of these best describes an opportunity cost?

Revolt · Accepted Answer

a trade-off

Question 10

Which is the best measurement to use to determine who might have the absolute advantage?

Revolt · Accepted Answer

high efficiency

Comparative and Absolute Advantage Answers

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