Graph 3-1 These Figures Illustrate the Production Possibilities Frontiers for Robinson Crusoe

question 59

Multiple Choice

Graph 3-1

These figures illustrate the production possibilities frontiers for Robinson Crusoe and Friday with 12 hours of labour.
-According to Graph 3-1:

• A)Robinson Crusoe has a comparative advantage in fish, and Friday has an absolute advantage in both goods
• B)Robinson Crusoe has a comparative advantage in fish, and Friday has an absolute advantage in coconuts
• C)Robinson Crusoe has a comparative advantage in fish, and Friday has an absolute advantage in neither goods
• D)Robinson Crusoe has a comparative advantage in coconuts, and Friday has an absolute advantage in fish

---

Definitions:

Consumption

The process by which goods and services are utilized to satisfy human wants, including the use of resources.

Income

The monetary payment received by an individual or household for their labor, investments, or from transfer payments, used to fund consumption and savings.

Interest Rate

The cost of borrowing money or the return on investment, typically expressed as an annual percentage of the principal.

Consumption

Families engaging in the use of products and services.