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Question
Table 2-7| Fred | Barney | |
| Pogo Sticks | 24 | 28 |
| Unicycles | 8 | 14 |
Table 2-7 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
Refer to Table 2-7. Which of the following statements istrue?
A) Fred has an absolute advantage in making both products.
B) Barney has an absolute advantage in making both products.
C) Barney has an absolute advantage in making pogo sticks and Fred in making unicycles.
D) Barney has an absolute advantage in making unicycles and Fred in making pogo sticks.
Answer
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B) the relative input prices.
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Which of the following would be categorized as an opportunity cost?
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b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above