When Mike Has an Absolute Advantage in the Production of Two

question 61

Multiple Choice

When Mike has an absolute advantage in the production of two goods over Tommy, Mike

• A) is better off if he does not engage in specialisation and trade with Tommy.
• B) is more productive in producing both goods than Tommy.
• C) is less productive than Tommy.
• D) cannot gain from trade with Tommy.
• E) always has a comparative advantage over Tommy in the production of both goods.

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Definitions:

Factor x2

A constituent or element that is doubled in quantity or influence, affecting outcomes or results in a specific context.

Water-Soluble Paint

A type of paint that is diluted and cleaned with water instead of solvents, making it environmentally friendly and easy to use.

Living Sculpture

Art that incorporates living, organic materials or living beings, blurring the line between art and life.

National Endowment

Funds or assets set aside on a national level to support various activities, often in the areas of arts, culture, or research.