Figure 3-4 -Refer to Figure 3-4. If Perry and Jordan Switch from If

question 420

Multiple Choice

Figure 3-4

-Refer to Figure 3-4. If Perry and Jordan switch from each person dividing their time equally between the production of novels and poems to each person spending all of their time producing the good in which they have a comparative advantage, then total production of novels will increase by

• A) 1.
• B) 2.
• C) 3.
• D) 4.

---

Definitions:

Comparative Advantage

The ability of a country, company, or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient trade and production.

Opportunity Cost

The value of the next best alternative forgone as the result of making a decision.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, technology).

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors, leading to greater output with the same resources.