If Robin Has an Absolute Advantage in Both Gardening and Baking

question 58

Multiple Choice

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then

• A)Robin cannot benefit by trading with Robert
• B)Robin can benefit by specializing in gardening if Robert specializes in baking
• C)Robin can benefit by specializing in baking if Robert specializes in gardening
• D)Robin and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what
• E)neither Robin nor Robert can benefit from trading with the other

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Definitions:

Income Quintile

A statistical division of population into five equal groups according to income levels.

Federal Income Tax

A tax levied by the United States federal government on the annual income of individuals, corporations, trusts, and other legal entities.

Welfare Eligibility

Welfare eligibility criteria determine who qualifies for social welfare programs, based on factors like income, family size, and employment status.

Income Distributions

The way in which a nation’s total earnings are spread among its population, which can influence economic policies and social stability.