AnswersMO-EconomicsComparative and Absolute Advantage

Comparative and Absolute Advantage Answers

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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
2
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Which best describes how producers benefit from specialization?

A
Producers can increase their profits.
B
Producers can expand their market.
C
Producers can offer a wider range of goods.
D
Producers can increase sales.
3

Which best explains why producers choose to specialize? Choose two answers.to increase competitionto gain a comparative advantageto decrease the amount of goods producedto maintain market shareto increase efficiency

A
to increase competition
B
to gain a comparative advantage
C
to decrease the amount of goods produced
D
to maintain market share
E
to increase efficiency
4

Which scenario is the best example of an opportunity cost?

A
A computer company issues a recall on its tablets.
B
A computer company produces fewer laptops to meet tablet demand.
C
A computer company reduces the price on last year’s models.
D
A computer company stops making computers with CD/DVD drives.
5

efficiencyopportunityproductioncost

A
efficiency
B
opportunity
C
production
D
cost
6

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
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

Which most likely results from producers engaging in specialization?

A
Producers reduce their costs.
B
Producers increase their market share.
C
Producers decrease the materials needed for production.
D
Producers always offer more competitive pricing.
9

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

A
True
B
False
10

Production possibilityAbsolute advantageCompetitionSpecialization

A
Production possibility
B
Absolute advantage
C
Competition
D
Specialization

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