(Exhibit: Determining Comparative Advantage) Daisy Has a Lower Opportunity Cost

question 17

Multiple Choice

(Exhibit: Determining Comparative Advantage) Daisy has a lower opportunity cost for:
$\begin{array}{|l|l|l|}\hline & \text { Opportunity Cost of 1 Bread } & \text { Opportunity Cost of } 1 \text { Cake } \\\hline \text { Eric ( } 4 \text { loaves of bread }=2 \text { cakes }) & 1 / 2 \text { of a cake } & 2 \text { loaves of bread } \\\hline \text { Daisy }(5 \text { loaves of bread }=3 \text { cakes }) & 3 / 5 \text { of a cake } & 12 / 3 \text { loaves of bread } \\\hline\end{array}$

• A) baking bread.
• B) baking a cake.
• C) neither bread nor cake.
• D) both bread and cake.

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Definitions:

Understocked Quantity

The situation where the quantity of inventory available is less than the demand, leading to missed sales or delays.

Firm's Profits

The financial gain achieved by a company, which is the difference between its revenue and its expenses.

Quick Response

A business strategy aimed at decreasing lead times and enhancing flexibility in operations to meet customer demand efficiently.

Manufacturer Profit

The financial gain a manufacturing company secures from its operations after deducting costs associated with production and distribution.