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Author Question: Fab Tools Inc can produce 150 widgets and 100 axes in a month. Another company AllMyTools Inc can ... (Read 40 times)

Pea0909berry

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on: Jun 30, 2018
Fab Tools Inc can produce 150 widgets and 100 axes in a month. Another company AllMyTools Inc can produce 80 widgets and 50 axes per month. Which of the following statements is true?
 a. Fab Tools has an absolute advantage in production of both goods.
  b. AllMyTools has an absolute advantage in production of both goods.
  c. AllMyTools has a comparative advantage in production of axes.
  d. Fab Tools has a comparative advantage in production of widgets only.

Question 2

If a company is producing at a level of output at which the long-run average-total-cost curve reaches a minimum, then the company:
 a. is experiencing economies of scale.
  b. is operating at its minimum efficient scale.
  c. is experiencing increasing returns to scale.
  d. will shut down.
  e. is experiencing diseconomies of scale.


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morganmarie791

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

b


Pea0909berry

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Reply 2 on: Jun 30, 2018
Excellent

nyrave

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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