Consider the Following Scenario to Answer the Questions That Follow

question 123

Multiple Choice

Consider the following scenario to answer the questions that follow.
On a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with blanks where you can calculate the opportunity cost.

-Who has an absolute advantage in spreading mulch?

• A) Zuckerberg has the advantage because he gives up fewer trees each time he spreads one cubic yard of mulch.
• B) Gates has the advantage because he gives up fewer trees each time he spreads one cubic yard of mulch.
• C) Zuckerberg has the advantage because he gives up more trees each time he spreads one cubic yard of mulch.
• D) Neither has an absolute advantage in spreading mulch.
• E) Both parties have an absolute advantage in planting trees.

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Definitions:

Interest Earn

The income received from investing funds or the amount of profit made on an investment over a certain period.

Total Interest Earned

The cumulative amount of interest received from an investment over a particular period.

Original Investment

The initial amount of money put into an investment or project, serving as the baseline for measuring future earnings or losses.

Nominal Interest Rate

The interest rate before adjustments for inflation, as opposed to the real interest rate.