Comparative and Absolute Advantage Answers

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1
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higherlowermultiple

A
higher
B
lower
C
multiple
2
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Which of these best describes an opportunity cost?

A
a win-win
B
a loss
C
a chance
D
a trade-off
3

This table shows the number of cookies several bakeries sell each day.Bakery Number of Cookies Sold Mrs. Track’s 90 Chips 100 The Bakeshop 75 Uncle John’s 125 All else being equal, which bakery has the absolute advantage?

A
Mrs. Track’s
B
Chips
C
The Bakeshop
D
Uncle John’s
4

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?

A
The Dairy
B
Ice Cream, Inc.
C
Frozen Treats
D
Bob & Gary’s
5

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

A
developing expertise in certain types of production
B
limiting the types of goods and services produced
C
targeting specific consumers and retailers
D
producing certain items for specific market segments
6

What can a producer gain by specializing?

A
sales
B
new customers
C
absolute advantage
D
opportunity costs
7

Which best describes how consumers may benefit from specialization?

A
Consumers can only purchase high-quality goods.
B
Consumers have more price options.
C
Consumers receive more sale offers.
D
Consumers find products at lower prices.
8

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

A
True
B
False
9

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?

A
Café con Leche
B
Beans Brothers
C
Colombian Co.
D
Turkish Coffee Company
10

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

A
a lower opportunity cost than any competitor can.
B
a faster rate than any competitor can.
C
a greater volume than any competitor can.
D
a lower cost than any competitor can.

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