Table 2.5 Table 2.5 Shows the Output Per Month of Two People

question 74

Multiple Choice

Table 2.5

Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. Which of the following statements is true?

• A)Fred has a comparative advantage in making both products.
• B)Barney has a comparative advantage in making both products.
• C)Barney has a comparative advantage in making pogo sticks and Fred in making unicycles.
• D)Barney has a comparative advantage in making unicycles and Fred in making pogo sticks.

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Definitions:

Elastic

Refers to the degree to which the demand or supply for a product or service changes in response to a change in price.

Downsloping

Describing a curve or line that moves from a higher to a lower point, often used to illustrate the downward trend in price and quantity relationships in economics.

Marginal Revenue Curve

A graphical representation showing how the revenue from selling one additional unit varies.

Horizontal

A line or direction parallel to the ground or to the bottom edge of a page, representing equality or uniformity in a graphical representation.