Suppose You Can Type a Paper in Two Hours or Mow

question 244

Multiple Choice

Suppose you can type a paper in two hours or mow the lawn in four hours, while it takes your friend Ann eight hours to type a paper or two hours to mow the lawn. Which of the following is true?

• A) You have a comparative advantage in typing.
• B) You have a comparative advantage in mowing the lawn.
• C) You and Ann could save time if you mowed her lawn while she typed your paper.
• D) You and Ann cannot gain from specialization and trade.

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Definitions:

Hard Money

Referred to gold and silver currency—also called specie.

Specie

Coins made from precious metal and used as a medium of exchange; distinct from paper currency.

Panic of 1837

A financial crisis in the United States that led to a major recession lasting until the mid-1840s, triggered by a speculative fever and failure of banks.

Alexis de Tocqueville

A French political thinker and historian best known for his works "Democracy in America," examining the democratic revolution that he believed had been occurring over the previous several hundred years.