John Can Make Pizza at a Lower Opportunity Cost Than

question 48

Multiple Choice

John can make pizza at a lower opportunity cost than Allen, but Allen can make more pizzas per day than John. Therefore,

• A) John has a comparative advantage in pizza.
• B) John has an absolute advantage in pizza.
• C) John cannot benefit from trade with Allen.
• D) Allen has a comparative advantage in pizza.
• E) Allen cannot benefit from trade with John.

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Definitions:

"As Is"

A term specifying that an item is being sold in its current condition, with all faults and without warranty, typically in a sales contract.

"With All Faults"

A term in contracts indicating that the buyer accepts the item as is, including all defects.

Express Warranty

An express warranty is an explicit guarantee made by a seller regarding the quality, functionality, or performance of a product, which forms part of the contract of sale.

"As Is"

The term "as is" denotes a condition of sale in which the buyer accepts an item in its current state, with all faults and without warranty, implying the buyer cannot hold the seller responsible for any defects.