Use the Following Scenario to Answer the Next Four Questions

question 21

Multiple Choice

Use the following scenario to answer the next four questions:
RayRay and Andrew produce baseballs and golf balls. RayRay can produce six baseballs per hour or four golf balls per hour. Andrew can produce three baseballs per hour or one golf ball per hour.
-Based on the scenario,which of the following is true?

• A) RayRay has an absolute advantage in producing baseballs but not golf balls.
• B) RayRay has an absolute advantage in producing golf balls but not baseballs.
• C) RayRay has an absolute advantage in producing both goods.
• D) RayRay has an absolute advantage in producing neither good.
• E) RayRay does not have any comparative advantage.

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Definitions:

Political Goods

Services or benefits, such as security and safety, provided by a government to its citizens, which are non-exclusive and cannot be easily provided by the private sector.

Coercive Force

The use or threat of force to persuade someone to act in a certain way, often seen in legal or military contexts.

Private Firms

Businesses owned by private individuals or groups, as opposed to being publicly traded or government-owned.

Subsidies

Financial support extended by the government to companies, farmers, or consumers, often aimed at encouraging certain behaviors or reducing the price of essential goods.