Tom and Di Grow Tomatoes and Turnips

question 321

Multiple Choice

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if
)

• A) Tom can grow more tomatoes than Di can
• B) his marginal benefit from tomatoes is greater than Di's
• C) his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes
• D) his opportunity cost of tomatoes is less than his opportunity cost of turnips

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Definitions:

Lemons

A citrus fruit with a bright yellow color and sour taste, often used in cooking and beverages.

Plums

A type of fruit that belongs to the genus Prunus, known for their sweet taste and juicy texture, often consumed fresh, dried, or in various culinary dishes.

Expected Value

The anticipated value for a given investment or decision in probability and statistics, calculated as the sum of all possible values each multiplied by the probability of occurrence.

Risk Trading

The act of exchanging financial instruments or commodities with a variable level of risk, often in the hope of gaining a higher return.