Table 1 Shows the Units of Output a Worker Can

question 24

Multiple Choice

Table 1 shows the units of output a worker can produce per month in Australia and Korea. ?
$\begin{array}{|l|l|l|}\hline & \text { Food } & \text { Electronics } \\\hline \text { Australia } & 20 & 5 \\\hline \text { Korea } & 8 & 2 \\\hline\end{array}$
?
Refer to table 1. Which of the following statements about absolute advantage is true?

• A) Australia has an absolute advantage in the production of food while Korea has an absolute advantage in the production of electronics.
• B) Korea has an absolute advantage in the production of food while Australia has an absolute advantage in the production of electronics.
• C) Australia has an absolute advantage in the production of both food and electronics.
• D) Korea has an absolute advantage in the production of both food and electronics.

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Definitions:

Market Supply Curve

A graphical representation showing the total quantity of a good that sellers are willing and able to sell at various prices, holding all else constant.

Purely Competitive

A market structure characterized by a large number of small firms producing similar products, with easy entry and exit from the market, leading to price-taking behavior.

New Firms

New firms refer to businesses that have been recently established and are in the early stages of their operational life.

Long-Run Equilibrium

A state in which all factors of production can be adjusted, allowing firms to enter or exit the market, resulting in a situation where economic profits are zero in a perfectly competitive market.