The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that
A) Don has an absolute advantage in the production of pencils, and Bob has an absolute advantage in the production of pens.
B) Bob has an absolute advantage in the production of pencils, and Don has an absolute advantage in the production of pens.
C) Don has a comparative advantage in the production of both pencils and pens.
D) Bob has a comparative advantage in the production of pencils.
D
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Refer to Table 2-12. What is Honduras's opportunity cost of producing one canoe?
A) 1/5 of a sailboat B) 1.5 sailboats C) 5 sailboats D) 6 sailboats
If the relative market price of producing cotton is more than the opportunity cost of producing it in the South,
(a) the market price of cotton will fall in the long run. (b) producers will increase the supply of cotton in the long run. (c) resources will flow away from the production of cotton, causing the supply of it to decline with the passage of time. (d) the situation will remain unchanged as long as supply and demand remain in balance.