Exploring Absolute and Comparative Advantage in Economics

What is assumed about transportation costs in the economic model discussed?

• They are variable

• They are zero

• They are high

• Not mentioned

What are the assumed characteristics of goods in the economic model?

• Scarce

• Abundant

• Differentiated

• Homogeneous

What does the economic model assume about knowledge?

• Limited knowledge

• Perfect knowledge

• No knowledge

• Irrelevant knowledge

Which country has the absolute advantage in pizza production?

• Country X

• Neither country

• Country Y

• Both countries

Which country has the absolute advantage in widget production?

• Country X

• Country Y

• Both countries

• Neither country

What does comparative advantage focus on in terms of costs?

• Opportunity costs

• Variable costs

• Fixed costs

• Production costs

How is the opportunity cost of pizza calculated for Country X?

• 1 pizza for 0.5 widgets

• 1 pizza for 2 widgets

• 2 pizzas for 1 widget

• 1 pizza for 1 widget

What is the opportunity cost of producing a widget in Country Y?

• 1 pizza

• 0.5 pizzas

• 0.2 pizzas

• 0.1 pizzas

What is the opportunity cost of producing a pizza in Country Y?

• 2 widgets

• 1 widget

• 5 widgets

• 10 widgets

Which country should specialize in widget production according to comparative advantage?

• Both countries

• Country Y

• Neither country

• Country X