Suppose You Can Type a Paper in Two Hours or Mow

question 226

Multiple Choice

Suppose you can type a paper in two hours or mow the lawn in four hours. It takes your friend Ann eight hours to type a paper of the same length and five hours to mow the same size of lawn. Which of the following is true?

• A) Ann is the high-opportunity cost producer of both typing and mowing.
• B) Since you can type papers and mow lawns faster than Ann, you and Ann cannot benefit from specialization and trade.
• C) You and Ann could expand output and gain from trade if she specialized in mowing lawns and you specialized in typing papers.
• D) You and Ann could expand output and gain from trade if she specialized in typing papers and you specialized in mowing lawns.

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Definitions:

Nonrefundable Ticket

A ticket purchase that cannot be returned for a refund, often cheaper than refundable options and common in air travel.

Remainder

The amount left over or remaining after division or allocation.

Alternative

An option or choice that is available as a substitute or replacement for something else.

Market Supply Curve

A graphical representation showing the total quantity of a good that producers are willing to sell at various prices within a given time period.