Suppose Jim and Tom Can Both Produce Baseball Bats

question 93

Multiple Choice

Suppose Jim and Tom can both produce baseball bats.If Jim's opportunity cost of producing baseball bats is lower than Tom's opportunity cost of producing baseball bats,then

• A)Tom must have an absolute advantage in the production of baseball bats.
• B)Jim must have an absolute advantage in the production of baseball bats.
• C)Tom has a comparative advantage in the production of baseball bats.
• D)Jim has a comparative advantage in the production of baseball bats.

---

Definitions:

Customary Pricing

Setting prices based on what is traditionally expected or accepted within a market or by customers.

Target Pricing

A pricing strategy where the selling price of a product is determined based on the anticipated consumer demand and desired profit margin, often before the product is launched.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which includes costs that vary directly with the production volume, such as raw materials and labor.

Fixed Cost

Expenses that do not change with the level of goods or services produced by a business, such as rent or salaries.