If Jeremy Has an Absolute Advantage in Cooking and Margaret

question 76

Multiple Choice

If Jeremy has an absolute advantage in cooking and Margaret has an absolute advantage in cleaning, then

• A)Jeremy has a comparative advantage in cooking, and Margaret has a comparative advantage in cleaning
• B)Jeremy has a comparative advantage in cleaning, and Margaret has a comparative advantage in cooking
• C)we can conclude nothing about comparative advantage
• D)Jeremy has a comparative advantage in cooking, but we can conclude nothing about Margaret
• E)Margaret has a comparative advantage in cleaning, but we can conclude nothing about Jeremy

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Definitions:

Consumption Sector

Part of the economy that involves the purchase of goods and services by individuals and households.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment.

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real rate, which is adjusted for the effects of inflation.

Expected Rate

The anticipated yield or return on an investment during a specific period, often estimated based on historical data and future projections.