If Irene Can Make Either Four Chairs or One Table

question 28

Multiple Choice

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then

• A) Irene has the absolute advantage in the production of chairs.
• B) Irene has the comparative advantage in the production of tables.
• C) Greg has the absolute advantage in the production of chairs.
• D) Greg has the comparative advantage in the production of chairs.

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Definitions:

Farmer

A person involved in farming, cultivating live entities for consumption or base materials.

Average Variable Cost

The cost per unit produced that varies with the level of output, calculated by dividing total variable costs by the quantity of output.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.

Profit-Maximizing

A business strategy focused on increasing profits to the highest possible level given the firm's constraints.