Exam 8: Gains From Trade

People have different abilities for performing the same two tasks, and you want to identify who has a comparative advantage in one of the tasks. Which of the following is NOT one of the three steps for identifying, who has a comparative advantage in performing the selected task?

Barlow and Rusia own a nail salon. A manicure takes Barlow 60 minutes to complete and takes Rusia 45 minutes to complete. Completing a pedicure takes Barlow 45 minutes and takes Rusia 30 minutes. Who has a comparative advantage in pedicures?

The person who can produce a product using the fewest inputs has _____ in that product.

Marius and Jennifer are going to sell cupcakes and muffins at their third annual fundraiser bake sale. In one day, Marius can make 40 cupcakes or 20 muffins, and Jennifer can make 15 cupcakes or 15 muffins. Based on this information, _____ has the absolute advantage in cupcakes, and _____ has the absolute advantage in muffins.

A person is said to have a comparative advantage if they:

A knowledge problem exists when

(Table: Mugs and Baseballs) Use Table: Mugs and Baseballs. Charlotte and Bernard make mugs and kites. Who should specialize in the production of mugs? ​ ​

You have an absolute advantage in producing a product if you:

The price of gasoline rises. Buyers of gasoline notice this and start to find ways to buy less gasoline. Sellers and producers of gasoline notice the price change and start to produce more. Analysts start to predict that sales of electric cars will rise and sales of gasoline-powered cars will stagnate. Use this scenario explain the signal, incentive, and bundle of information roles of price.

When the price of firewood changes, Dan realizes that something must be different in the firewood market. Price is functioning as

Ang can mow the lawn in two hours. Bill takes three hours to mow the same lawn. What can you conclude from this information?

Marius and Jennifer are going to sell cupcakes and muffins at their third annual fundraiser bake sale. In one day, Marius can make 40 cupcakes or 20 muffins, and Jennifer can make 15 cupcakes or 15 muffins. Based on this information, _____ has the comparative advantage in cupcakes, and _____ has the comparative advantage in muffins.

When a price is referred to as a signal, this means that price

If you can complete a task at a lower opportunity cost than anyone else, then you

(Table: Fazio and Gabriella's opportunity cost) The table provides data on how long it takes Fazio and Gabriella each to learn to play a particular new song on the piano and to complete a given person's tax return. Use the data to answer the question. Fazio's opportunity cost of completing tax returns is _____, and Gabriella's opportunity cost is _____.

When you assign tasks to employees based on comparative advantage, task assignments go to those with the

(Table: Joachim and Zane's opportunity cost) The table shows data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Who has a comparative advantage in washing windows?

If Bishan wants to capitalize on comparative advantage in his life, then he should:

Use the data in the table to answer the question. The table provides data on how long it takes Maia and Juanita to mow the lawn and weed the flower beds. Who has a comparative advantage in mowing lawns?

Marius and Jennifer are going to sell cupcakes and muffins at their third annual fundraiser bake sale. In one day, Marius can make 40 cupcakes or 20 muffins, and Jennifer can make 15 cupcakes or 15 muffins. What is Marius's opportunity cost of producing one cupcake?