Tom and Jerry Have Two Tasks to Do All Day

question 5

Multiple Choice

Tom and Jerry have two tasks to do all day: set traps and build bombs.If Tom spends all day setting traps,he will have set 16 traps.If he instead devotes his day to building bombs,Tom will build 4 bombs.If Jerry spends his day setting traps,he will set 14 traps;if he spends the day building bombs,he will build 7 bombs.Based on their production possibilities frontiers,Tom and Jerry:

• A)can both benefit from trade because absolute advantage exists.
• B)can both benefit from trade because comparative advantage exists.
• C)cannot benefit from trade because Tom has the absolute advantage in both goods.
• D)will not decide to trade because no comparative advantage exists.

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Definitions:

Enforceable Contract

A legally binding agreement between parties that can be enforced by law if not fulfilled as agreed.

Misrepresentation

The act of providing false or misleading information, often with the intent to deceive others during agreements or transactions.

Allegorical Statement

An expression that uses symbolic figures, actions, or representations to convey a deeper moral or spiritual meaning.

Metaphorical Statement

An expression that refers to one thing by mentioning another, used to make a comparison that emphasizes a particular point or concept.