Table 2-6 Table 2-6 Shows the Output Per Week of Week

question 209

Multiple Choice

Table 2-6
Table 2-6 shows the output per week of two people,James and Lucy.They can either devote their time to making wagons or making tricycles.
-Refer to Table 2-6.Which of the following statements is true?

• A)Lucy has a comparative advantage in making both products.
• B)James has a comparative advantage in making both products.
• C)Lucy has a comparative advantage in making wagons and James in making tricycles.
• D)Lucy has a comparative advantage in making tricycles and James in making wagons.

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Definitions:

Intermediate Goods

Products used in the production process to make other goods, but are not part of the final product.

Double Counting

The mistake of including both the value of intermediate products and the value of final products in calculating gross domestic product; counting the same production more than once

Financial Assets

Instruments that represent a financial value, including stocks, bonds, bank deposits, and mutual funds.

Transfer Payments

Cash or in-kind benefits given to individuals as outright grants from the government.