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Author Question: Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one ... (Read 44 times)

arivle123

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  • Posts: 569
on: Jul 1, 2018
Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one hour. Which of the following statements is correct?
 a. Don has an absolute advantage over Bob in the production of pencils and Bob in the production of pens
  b. Bob has an absolute advantage over Don in the production of pencils
  c. Bob has a comparative advantage over Don in the production of pens
  d. Don has a comparative advantage over Bob in the production of pens
  e. Don does not have a comparative advantage in the production of either good

Question 2

John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
 a. Harry has a comparative advantage in ironing.
  b. Harry has a comparative advantage in typing.
  c. Harry has an absolute advantage in typing.
  d. Harry has an absolute advantage in ironing.
  e. Neither can gain from specialization and exchange.


sarah_brady415

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Reply #1 on: Jul 1, 2018
Answer to Question 1

C

Answer to Question 2

A


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