(Exhibit: Determining Comparative Advantage) Who Has an Absolute Advantage in Baking

question 56

Multiple Choice

(Exhibit: Determining Comparative Advantage) Who has an absolute advantage in baking bread?
$\begin{array}{|l|l|l|}\hline & \text { Opportunity Cost of 1 Bread } & \text { Opportunity Cost of } 1 \text { Cake } \\\hline \text { Eric ( } 4 \text { loaves of bread }=2 \text { cakes }) & 1 / 2 \text { of a cake } & 2 \text { loaves of bread } \\\hline \text { Daisy }(5 \text { loaves of bread }=3 \text { cakes }) & 3 / 5 \text { of a cake } & 12 / 3 \text { loaves of bread } \\\hline\end{array}$

• A) Eric
• B) Daisy
• C) neither Eric nor Daisy
• D) both Eric and Daisy

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Definitions:

Settled First

Refers to resolving or concluding a matter before addressing subsequent issues, typically used in legal and financial contexts.

Creditors

Individuals or entities to whom money is owed by debtors; they have a legal right to demand payment according to the terms of the debt agreement.

RUPA

stands for the Revised Uniform Partnership Act, which is a set of laws adopted by states to govern the operation of partnerships.

Dissociated Partner

A partner who has severed their relationship with a partnership, resulting in a change in the business's management or structure.