Table 2-6 Table 2-6 Shows the Output Per Week of Week

question 19

Multiple Choice

Table 2-6
Table 2-6 shows the output per week of two people,James and Lucy.They can either devote their time to making wagons or making tricycles.
-Refer to Table 2-6.Which of the following statements is true?

• A)Lucy has an absolute advantage in making both products.
• B)James has an absolute advantage in making both products.
• C)Lucy has an absolute advantage in making wagons and James in making tricycles.
• D)James has an absolute advantage in making wagons and Lucy in making tricycles.

---

Definitions:

Variable Costs

Costs that change in proportion with the level of production or sales volume, such as materials and labor.

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, and equipment leases.

Variable Costs

Expenses that fluctuate in direct proportion to the volume of production or amount of output.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity, such as rent or salaries.