Homer and Teddy Are Stranded on a Desert Island

question 96

Multiple Choice

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following statements is correct?

• A) Teddy has an absolute advantage in both catching fish and picking fruit.
• B) Homer has an absolute advantage in both catching fish and picking fruit.
• C) Homer has an absolute advantage in catching fish and Teddy has an absolute advantage in picking fruit.
• D) Homer has an absolute advantage in picking fruit and Teddy has an absolute advantage in catching fish.

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Definitions:

Quota

Trade limitations set by the government which restrict the amount or fiscal value of products that can be brought in or sent out over a certain period.

Demand Price

The maximum amount consumers are prepared to spend on a product or service for a specific quantity.

Taxicab Medallions

License plates issued by a local government authority that allow a vehicle to operate as a taxi.

New York

A state in the northeastern U.S., known for New York City, a major cultural, financial, and commercial center, as well as other notable regions like the Adirondacks and the Finger Lakes.