In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of
A) bread, while Bob has a comparative advantage in the production of butter.
B) butter, while Bob has a comparative advantage in the production of bread.
C) bread and neither has a comparative advantage in the production of butter.
D) both bread and butter.
Question 2
When consumers' incomes increased 10 percent, the quantity of milk bought increased 5 percent. This result means
A) the demand for milk is income elastic.
B) milk is a necessity.
C) milk is a luxury.
D) milk is an inferior good.
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