If Kami Can Produce 40 Portable Power Banks or 30

question 201

Multiple Choice

If Kami can produce 40 portable power banks or 30 cellphones during a month's time, while Sally can produce 10 portable power banks or 20 cellphones, then it is correct to state that

• A) Kami has a comparative advantage in producing portable power banks.
• B) Kami has a comparative advantage in producing both portable power banks and cellphones.
• C) Sally has a comparative advantage in producing both portable power banks and cellphones.
• D) Sally has an absolute advantage in portable power banks.

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Definitions:

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, highlighting combinations that provide the same level of utility to the consumer.

Total Utility

The total gratification or enjoyment a customer receives from using a specific amount of products or services.

Marginal Rate

The increase or decrease in a unit of an outcome resulting from a one unit change in another variable.

Substitution

The economic principle whereby consumers replace more expensive items with less costly alternatives, or firms use different inputs in their production process.