Table 3.3 -Consider Two Individuals, Nigel and Mia, Who Produce Hair Pins

question 89

Multiple Choice

Table 3.3

-Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Which of the following is true?

• A) Nigel has both an absolute and comparative advantage in hair pin production.
• B) Nigel has both an absolute and comparative advantage in bandana production.
• C) Nigel has neither an absolute nor comparative advantage in hair pin production.
• D) Nigel has neither an absolute nor a comparative advantage in bandana production.

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Definitions:

Total Revenue

The total amount of money a company receives from its goods or services over a specific time period, calculated by multiplying price by quantity sold.

Yearly Return

The total gain or loss experienced on an investment over a period of one year.

Fixed Costs

Costs that do not change with the level of output, such as rent, salaries, and insurance premiums.

Short Run

A time period in which at least one factor of production is fixed, limiting the ability of a firm to adjust its output.