Janis mows the lawn in 1 hour and types a paper in 1 hour. Kristen mows the lawn in 2 hours and types a paper in 1 hour. Which of the following statements is true?
a. Kristen has an absolute advantage in typing and a comparative advantage in mowing.
b. Janis has an absolute advantage in both activities and a comparative advantage in typing.
c. Janis has an absolute advantage in both activities and a comparative advantage in mowing.
d. The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis.
e. Neither Janis nor Kristen would gain from specialization.
QUESTION 2If Jason can wash a car in 20 minutes and wash a dog in 10 minutes, and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?
a. The opportunity cost of washing a car is greater for Megan.
b. The opportunity cost of washing a car is one dog bath for Jason.
c. Megan could wash two cars in the time it takes to wash a dog.
d. Jason has both a comparative and an absolute advantage in washing a dog.
e. The opportunity cost of washing a dog is greater for Jason.
QUESTION 3Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one hour. Which of the following statements is correct?
a. Don has an absolute advantage over Bob in the production of pencils and Bob in the production of pens
b. Bob has an absolute advantage over Don in the production of pencils
c. Bob has a comparative advantage over Don in the production of pens
d. Don has a comparative advantage over Bob in the production of pens
e. Don does not have a comparative advantage in the production of either good
QUESTION 4John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
a. Harry has a comparative advantage in ironing.
b. Harry has a comparative advantage in typing.
c. Harry has an absolute advantage in typing.
d. Harry has an absolute advantage in ironing.
e. Neither can gain from specialization and exchange.
QUESTION 5Absolute advantage is based on opportunity cost.
a. True
b. False
Quick Reply
