Table 18.4 -Consider Two Individuals, Artie and Deena, Who Produce Wind Chimes

question 53

Multiple Choice

Table 18.4
-Consider two individuals, Artie and Deena, who produce wind chimes and sun dials. Artie's and Deena's weekly productivity are shown in Table 18.4. Which of the following is TRUE?

• A) Deena has an absolute advantage in producing both goods, and a comparative advantage in producing wind chimes.
• B) Deena has an absolute advantage in producing both goods, and a comparative advantage in producing sun dials.
• C) Deena has an absolute and a comparative advantage in producing both goods.
• D) Deena has an absolute advantage in producing both goods, but no one has a comparative advantage in producing either good.

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Definitions:

Average Cost

The expense associated with each unit's production, determined by splitting the total production costs by the units produced.

Analysis

The detailed examination or study of something in order to understand its nature, structure, or essential features.

Assumptions

Premises or beliefs taken as true without proof, often used as starting points for reasoning or calculations in various contexts.

Creative Destruction

A concept in economics which suggests that old ways of doing business are destroyed and replaced by new, more efficient methods.