Who Would Benefit from a Trade If David Has an Absolute

question 119

Multiple Choice

Who would benefit from a trade if David has an absolute advantage in both gardening and baking compared to Robert?  

• A) David would benefit by specializing in gardening if Robert specializes in baking. 
• B) David would benefit by specializing in baking if Robert specializes in gardening. 
• C) Both David and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what. 
• D) Neither David nor Robert would benefit from trading with the other.

Identify the role and importance of Earth's natural goods and services.

Understand the concept of marginal cost in the production of goods and services.

Describe the characteristics of a laissez-faire free-market economic system.

Explain the concept of the optimum level of resource use and its relevance.

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Definitions:

Demand For Capital

refers to the desire for investment in physical goods, technology, or equipment that can be used to produce other goods or services.

Derived Demand

The demand for a good or service that arises from the demand for another good or service, such as the demand for steel being derived from the demand for cars.

Productivity Of Labor

The measure of the output of goods and services produced by labor input, indicating the efficiency of labor use.

Demand For Labor

The need for employees by employers to carry out work, which varies with wage levels and economic conditions.