Comparative and Absolute Advantage Answers

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1
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This table shows the cost of producing ice cream for several manufacturers.Manufacturer Amount Produced CostThe Dairy 100 gallons $10 Ice Cream, Inc. 100 gallons $15 Frozen Treats 150 gallons $12 Bob & Gary’s 125 gallons $15 Which manufacturer has the absolute advantage?

A
The Dairy
B
Ice Cream, Inc.
C
Frozen Treats
D
Bob & Gary’s
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A
higher
B
lower
C
multiple
3

Which best describes how consumers may benefit from specialization?

A
Consumers can only purchase high-quality goods.
B
Consumers have more price options.
C
Consumers receive more sale offers.
D
Consumers find products at lower prices.
4

This table shows the number of cookies several bakeries sell each day.Bakery Number of Cookies Sold Mrs. Track’s 90 Chips 100 The Bakeshop 75 Uncle John’s 125 All else being equal, which bakery has the absolute advantage?

A
Mrs. Track’s
B
Chips
C
The Bakeshop
D
Uncle John’s
5

Which is the best measurement to use to determine who might have the absolute advantage?

A
high opportunity cost
B
low opportunity cost
C
low efficiency
D
high efficiency
6

Which scenario is the best example of an opportunity cost?

A
A computer company issues a recall on its tablets.
B
A computer company produces fewer laptops to meet tablet demand.
C
A computer company reduces the price on last year’s models.
D
A computer company stops making computers with CD/DVD drives.
7

Carmen wants to open her own coffee shop. She has narrowed down a list of wholesale retailers and their cost per pound of coffee beans. Whole Sale Company Cost per lb.Café con Leche$8.50Beans Brothers$7.50Colombian Co.$11.25Turkish Coffee Company$6.25Which company has the comparative advantage in cost per pound of coffee?

A
Café con Leche
B
Beans Brothers
C
Colombian Co.
D
Turkish Coffee Company
8

Which calculation helps determine which producer has the absolute advantage?

A
Resources used multiplied by amount produced
B
Amount produced divided by resources used
C
Amount produced minus resources used
D
Resources used divided by amount produced
9

Which best explains why producers choose to specialize? Choose two answers.

A
to increase competition
B
to gain a comparative advantage
C
to decrease the amount of goods produced
D
to maintain market share
E
to increase efficiency
10

Which best describes how producers benefit from specialization?

A
Producers can increase their profits.
B
Producers can expand their market.
C
Producers can offer a wider range of goods.
D
Producers can increase sales.

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