Chapter 3 Questions for Review

Chapter 3 Questions for Review - Chapter3QuestionsforReview...

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Chapter 3 Questions for Review 1. The production possibilities frontier will be linear if the opportunity cost of producing a  good is constant no matter how much of that good is produced.  This will be most  likely if the good is not produced using specialized inputs. 2. Absolute advantage reflects a comparison of the productivity of one person, firm, or  nation to that of another, while comparative advantage is based on the relative  opportunity costs of the persons, firms, or nations. While a person, firm, or nation  may have an absolute advantage in producing every good, they cannot have a  comparative advantage in the production of every good. 3. Many examples are possible. Suppose, for example, that Roger can prepare a meal  of hot dogs and macaroni in just 10 minutes, while it takes Anita 20 minutes. Also  suppose that Roger can do all the laundry in 3 hours, while it takes Anita 4 hours. 
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This note was uploaded on 11/09/2011 for the course ECO 6789 taught by Professor Hu during the Spring '11 term at Campbell University .

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