Which Statement Best Describes the Absolute Advantage as Shown in the Graphs

question 29

Multiple Choice

Which statement best describes the absolute advantage as shown in the graphs?

• A) Pam has an absolute advantage in the production of both.
• B) Jim has an absolute advantage in the production of both.
• C) Jim has an absolute advantage in the production of pizzas, and Pam has an absolute advantage in the production of stromboli.
• D) Pam has an absolute advantage in the production of pizzas, and Jim has an absolute advantage in the production of stromboli.
• E) They both have an absolute advantage in the production of stromboli.

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Definitions:

ATC Curve

A graphical representation of a firm's average total costs over a range of output levels, typically U-shaped due to economies and diseconomies of scale.

Oligopoly

A market structure characterized by a small number of firms whose actions significantly affect each other.

Producers

Individuals or businesses involved in the creation of goods and services for sale in the market.

Market Structure

The organizational and other characteristics of a market that influence the nature of competition and pricing.