If Evan Has an Absolute Advantage in Cleaning and Bookkeeping

question 135

Multiple Choice

If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria, then

• A)Evan must also have a comparative advantage in cleaning and bookkeeping
• B)Evan must have a comparative advantage in cleaning
• C)Evan must have a comparative advantage in bookkeeping
• D)Gloria has a comparative advantage in neither activity
• E)we can conclude nothing about comparative advantage

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Definitions:

GDP

Gross Domestic Product, which measures the total value of all goods and services produced within a country’s borders in a specific time period.

Partnership

A lawful business structure operated by two or more people who jointly manage and divide profits.

Limited Liability

A legal structure that limits the personal financial responsibility of shareholders for the debts or actions of a corporation to the amount they invested.

Capital Acquisition

The process of acquiring capital assets, which are resources such as machinery, tools, or buildings, used to produce goods or services.