Unit 2 Quiz

The slope of production possibilities curve is

- negative which produces more own one good requiring producing less of the other

An individual has an absolute advantage in producing pizzas if that individual

can produce more pizzas in a given amount of time than anyone else.

ll points along the production possibilities curve are

efficient and attainable

Suppose Xin and Zander work in a bakery making pies and cakes. Suppose it takes Xin 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Zander 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct?

she could make 2/3 of a pie. For Zander, in the time it takes him to make a pie, he could make 1.33 (= 2/1.5) cakes, and in the time it takes him to make a cake, he could make 3/4 of a pie. Thus, Xin has the comparative advantage in cakes (because 2/3 < 3/4), and Zander has the comparative advantage in pies (because 1.33 < 1.5).

If you have a comparative advantage in a particular task then

you give up less to accomplish that task than others do - Lower opportunity cost