Which of the Following Describes Comparative Advantage

question 339

Multiple Choice

Which of the following describes comparative advantage?

• A) To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn.
• B) Company A can produce 4 boxes of cereal in a day whereas Company B can produce 5 boxes of cereal in a day.
• C) Firm A can produce a good at a cost of $3 and Firm B can produce the good at a cost of $4.
• D) Jane can type 50 words per minute and Joe can type 60 words per minute.

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Definitions:

M1

A category of the money supply that includes all physical money, such as coins and currency, as well as demand deposits and other liquid assets held by the central bank.

M2

An indicator of the monetary base that encompasses cash, deposits in checking accounts, and readily convertible quasi-cash assets.

Money Supply

The collective amount of all financial means in an economy, considering cash, coins, and deposits in checking and savings accounts, at a specific moment.

Backed by Gold

Refers to a currency that is guaranteed by gold reserves, meaning its value is supported by the amount of gold held by the issuing authority.