Question 1

Which of the following explains why someone with an absolute advantage in painting houses may NOT spend their time painting houses?

Accepted Answer

A)  They may have a comparative advantage in painting houses, as well. 
B)  Even though they have the absolute advantage in painting houses, they still may not be very good at it. 
C)  In an efficient market, someone with an absolute advantage in painting houses will always spend their time painting houses. 
D)  They may be relatively better at something else than painting houses. 
A)  They may have a comparative advantage in painting houses, as well. 
B)  Even though they have the absolute advantage in painting houses, they still may not be very good at it. 
C)  In an efficient market, someone with an absolute advantage in painting houses will always spend their time painting houses. 
D)  They may be relatively better at something else than painting houses.

Question 2

A country has a comparative advantage in producing one good if its labor cost is lower than that for other countries.

Accepted Answer

A) True 
 B)False

Which of the following explains why someone with an absolute advantage in painting houses may NOT spend their time painting houses?

A country has a comparative advantage in producing one good if its labor cost is lower than that for other countries.

The Big Ideas

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Exam 2: The Power of Trade and Comparative

Which of the following explains why someone with an absolute advantage in painting houses may NOT spend their time painting houses?

A country has a comparative advantage in producing one good if its labor cost is lower than that for other countries.

The Big Ideas

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters