Tom and Di Grow Tomatoes and Turnips

question 294

Multiple Choice

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if

• A) Tom can grow more tomatoes than Di can.
• B) his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes.
• C) his opportunity cost of tomatoes is less than his opportunity cost of turnips.
• D) his marginal benefit from tomatoes is greater than Di's.

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Definitions:

Utility Functions

These are equations that quantify the happiness or satisfaction a consumer receives from consuming various goods and services.

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for an additional unit of another good, while keeping utility constant.

Wheat

A cereal grain, originally from the Levant region of the Near East but now cultivated worldwide, which is a staple food in many parts of the world.

Milk

A nutrient-rich liquid food produced in the mammary glands of mammals, commonly consumed by humans as a beverage or used in the production of various dairy products.