Shawn Can Produce Beach Towels at a Lower Opportunity Cost

question 78

Multiple Choice

Shawn can produce beach towels at a lower opportunity cost than Larissa. Who has an absolute or a comparative advantage in the production of beach towels?

• A) Shawn has a comparative advantage.
• B) Larissa has a comparative advantage.
• C) Shawn has an absolute advantage.
• D) Larissa has an absolute advantage.

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Definitions:

Economic Growth

The increase in the production of goods and services in an economy over a period of time, typically measured as the annual rate of increase in real GDP.

Portfolio Return

The overall gain or loss experienced by an investment portfolio over a specified period.

Stock Returns

The gain or loss made on an investment in shares, generally represented as a percentage of the investment’s initial cost.

Business Cycle

The fluctuation of economic activity that an economy experiences over a period of time, marked by phases of expansion and contraction.