Comparative and Absolute Advantage

Question 1

Which most likely results from producers engaging in specialization?

Revolt · Accepted Answer

Producers reduce their costs.

Question 2

Carmen wants to open her own coffee shop. She has narrowed down a list of wholesale retailers and their cost per pound of coffee beans. Whole Sale Company Cost per lb.Café con Leche$8.50Beans Brothers$7.50Colombian Co.$11.25Turkish Coffee Company$6.25Which company has the comparative advantage in cost per pound of coffee?

Revolt · Accepted Answer

Turkish Coffee Company

Question 3

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

Revolt · Accepted Answer

False

Question 4

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.

Question 5

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 6

Which scenario is the best example of an opportunity cost?

Revolt · Accepted Answer

A computer company produces fewer laptops to meet tablet demand.

Question 7

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 8

higherlowermultiple

Revolt · Accepted Answer

lower

Question 9

Which best describes how consumers may benefit from specialization?

Revolt · Accepted Answer

Consumers find products at lower prices.

Question 10

Which calculation helps determine which producer has the absolute advantage?

Revolt · Accepted Answer

Amount produced divided by resources used

Comparative and Absolute Advantage Answers

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