If John Can Produce 10 Chairs or 20 Lamps During

question 169

Multiple Choice

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

• A) Mary in producing both goods
• B) John in producing both goods
• C) Mary in producing chairs, John in producing lamps
• D) John in producing chairs, Mary in producing lamps
• E) Both Mary and John in both goods

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Definitions:

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community.

Bilateral Monopoly

A market structure in which there is only one buyer (a monopsony) and one seller (a monopoly), negotiating over the price and quantity of a specific product or resource.

Monopolists

Entities that are the sole providers of a particular product or service in a market, giving them significant control over market price.

World Market

The global arena where goods, services, and financial assets are traded across countries.