AnswersMO-EconomicsComparative and Absolute Advantage

Comparative and Absolute Advantage Answers

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1
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Which describes a way in which consumers most likely benefit from producers’ absolute advantage?

A
Consumers’ opportunity costs decrease.
B
Prices decrease as a result of increased production efficiencies.
C
Producers always use savings to improve products.
D
Consumers can find a given product in more places.
2
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What can a producer gain by specializing?

A
sales
B
new customers
C
absolute advantage
D
opportunity costs
3

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.
4

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.
5

[BLANK]

A
Production possibility
B
Absolute advantage
C
Competition
D
Specialization
6

Which best explains why producers choose to specialize? Choose two answers.

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
7

[BLANK]

A
higher
B
lower
C
multiple
8

Which calculation helps determine which producer has the absolute advantage?

A
Resources used multiplied by amount produced
B
Amount produced divided by resources used
C
Amount produced minus resources used
D
Resources used divided by amount produced
9

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.
10

Which of these best describes an opportunity cost?

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

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