Table 3.4 -Consider Two Individuals, Artie and Deena, Who Produce Wind Chimes

question 88

Multiple Choice

Table 3.4

-Consider two individuals, Artie and Deena, who produce wind chimes and sun dials. Artie's and Deena's weekly productivity are shown in Table 3.4. Which of the following is true?

• A) Artie has a comparative advantage in producing wind chimes but not sun dials.
• B) Artie has a comparative advantage in producing sun dials but not wind chimes.
• C) Artie has a comparative advantage in producing both goods.
• D) Artie does not have a comparative advantage in producing either good.

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Definitions:

Market Price

The existing cost at which one can buy or sell a service or asset.

Output

The total amount of goods or services produced by a company, industry, or economy within a specific period.

Kinked Market Supply

A theoretical market supply curve where firms face a discontinuous elasticity of demand at different prices, leading to price stability within a certain range.

Producer Surplus

The difference between what producers are willing to sell a product for and the actual price at which they sell it.