Quiz_2_Answer_Key

Quiz_2_Answer_Key - Quiz Consider the following graph where...

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Quiz 1/23/09 Consider the following graph, where 2 PPF’s are represented. The red PPF belongs to country A, and the blue PPF belongs to country B. The countries produce Apples and Oranges. 1. Which of the following is true? a) country B has an absolute advantage over country A in the production of both fruits. b) country A has an absolute advantage over untry B in the production of both fruits. country B in the production of both fruits. c) country A has an absolute advantage in the production of apples, but not oranges d) country B has an absolute advantage in the production of oranges, but not apples Correct Answer: b . Remember that “Absolute advantage is a situation in which one person is more productive than another person in several or even all activities”. Country A can produce more apples and more oranges than country B, so it has an absolute advantage in both fruits.
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2. What is the opportunity cost of producing one more Orange in Country B? a) 1 apples
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Quiz_2_Answer_Key - Quiz Consider the following graph where...

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