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21 Dec 2017
1. Choose the Correct Answer: Andreas and Katya can only produce beer and chips. Andreas has a comparative advantage in neither beer nor chips. We therefore know that: (a) Katya has an absolute advantage in the production of beer and chips; (b) Andreas and Katya have the same opportunity cost for beer and chips; (c) Katya has a comparative advantage in the production of both beer and chips; (d) Andreas must have lower opportunity costs of production in both goods; or (e) none of the above.
1. Choose the Correct Answer: Andreas and Katya can only produce beer and chips. Andreas has a comparative advantage in neither beer nor chips. We therefore know that: (a) Katya has an absolute advantage in the production of beer and chips; (b) Andreas and Katya have the same opportunity cost for beer and chips; (c) Katya has a comparative advantage in the production of both beer and chips; (d) Andreas must have lower opportunity costs of production in both goods; or (e) none of the above.
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Related textbook solutions
Related questions
5. Part A
A point inside the production possibilities frontier is
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A. efficient, but not feasible. |
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B. feasible, but not efficient. |
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C. both efficient and feasible. |
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D. neither efficient nor feasible. |
Part B
If at its present point of production Germany must give up 10 units of beer (measured on the vertical axis) to produce one more unit of bread (measured on the horizontal axis), its ____________ of producing another unit of beer is ____________.
| a. |
absolute advantage; 1/10 |
| b. |
opportunity cost; 1/10 |
| c. |
comparative advantage; 1/10 |
| d. |
opportunity cost; 10 |
