Use the Following Scenario to Answer the Next Eight Questions

question 82

Multiple Choice

Use the following scenario to answer the next eight questions:
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
-Based on the scenario,which of the following is true?

• A) Karl has a comparative advantage in producing cars but not trucks.
• B) Karl has a comparative advantage in producing trucks but not cars.
• C) Karl has a comparative advantage in producing both goods.
• D) Karl has a comparative advantage in producing neither good.
• E) Karl does not have any absolute advantage.

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Definitions:

Core Business

The primary area of activity for a company, focusing on the main products or services that generate the most revenue or activity.

Diversification

A business strategy that involves entering into new markets or adding new products to a company's portfolio to reduce risk and capitalize on new opportunities.

Diffusion of Innovation Curve

A model that illustrates the adoption of a new product or technology over time, categorizing adopters into segments such as early adopters and laggards.

Diffusion of Innovation

A theory that explains how, why, and at what rate new ideas and technology spread through cultures.