Suppose That Opportunity Costs Are Constant and That Fred Can

question 117

Multiple Choice

Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can produce a maximum of eight pies or two cakes in a day. Ethel has an comparative advantage in the production of

• A) cakes.
• B) pies.
• C) both cakes and pies.
• D) neither cakes nor pies.

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Definitions:

World's Food Supply

The total amount of food produced and available for consumption globally, influenced by agricultural practices, climate conditions, trade policies, and economic factors.

Geometrically

Geometrically refers to something related to geometry, or in a broader sense, can describe the exponential or multiplicative manner of growth or arrangement.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a specific time period.

Imported Oil

Oil that is bought from foreign countries and brought into a country for use.