Use the Following to Answer Question

question 238

Multiple Choice

Use the following to answer question:

-(Table: Bongos and Frisbees) Use Table: Bongos and Frisbees.Bill and Mickey make bongos and Frisbees.Who has the comparative advantage in producing Frisbees?

• A)Bill
• B)Mickey
• C)both
• D)neither

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Definitions:

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Break-Even Analysis

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output.

Price-Setting Process

The method used by businesses to determine the selling price of their products or services, taking into account production costs, market demand, competition, and profit margins.