Table 2.5 Table 2.5 Shows the Output Per Week of Two

question 71

Multiple Choice

Table 2.5

Table 2.5 shows the output per week of two jewelers, Serena and Haley.They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.5.Which of the following statements is true?

• A)Haley has an absolute advantage in making both products.
• B)Serena has an absolute advantage in making both products.
• C)Haley has an absolute advantage in making bracelets and Serena in making necklaces.
• D)Haley has an absolute advantage in making necklaces and Serena in making bracelets.

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Definitions:

Total Product Curve

A graphical representation showing how the total quantity of output produced by a firm varies with the quantity of a variable input, keeping all other inputs constant.

Average Product

The output per unit of input, such as the quantity of goods produced per unit of labor.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase and may decrease.

Labor Input

The amount of work contributed by employees, measured in hours or effort, used in the production of goods and services.