Which of the Following Describes Comparative Advantage

question 45

Multiple Choice

Which of the following describes comparative advantage?

• A)Firm A can produce a good at a cost of $3 a unit,and Firm B can produce the same good at a cost of $4 a unit.
• B)Jane can type 50 words per minute,and Joe can type 60 words per minute.
• C)Firm A can produce 4 boxes of cereal in a day,and Firm B can produce 5 boxes of cereal in a day.
• D)To produce a basket of wheat,Farmer John must give up growing 2 baskets of corn,whereas Farmer Ben must give up 3 baskets of corn to produce a basket of wheat.
• E)Bill can read one book in a week,but it takes Jeannie 10 days to read the same book.

---

Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the amount of the good that consumers are willing to purchase at that price.

Deadweight Loss

The reduction in economic efficiency that happens when equilibrium is not reached or is unattainable for a specific good or service.

Import Tariff

A tax imposed by a government on goods and services imported into its country to protect domestic industries from foreign competition.

Supply and Demand

Economic model of price determination in a market, showing the relationship between the quantity of goods that producers wish to sell at various prices and the quantity consumers wish to buy.