Both Bill and Mary Produce T-Shirts and Hats

question 416

Multiple Choice

Both Bill and Mary produce t-shirts and hats.If Bill's opportunity cost of 1 t-shirt is 4 hats and Mary's opportunity cost of 1 t-shirt is 3 hats,then

• A) Bill has a comparative advantage in the production of t-shirts.
• B) Mary has a comparative advantage in the production of t-shirts.
• C) Mary has a comparative advantage in the production of hats.
• D) Bill has a comparative advantage in the production of both t-shirts and hats.

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Definitions:

Substitution

In law or economics, the act of replacing one party or element of a contract with another.

Rescission

The act of canceling or annulling a contract, returning the parties involved to their positions prior to the agreement.

Nominal Damages

Monetary damages awarded to a plaintiff in a very small amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm.

Actual Damages

Financial compensation awarded to a plaintiff to recover losses directly resulting from a defendant's actions.