This Question 5 pts This Test 150 pts Time Remaining 032641

This Question: 5 pts This Test: 150 pts Time Remaining: 03:26:41 0 of 30 Tom and Abby produce rackets and balls. The graphs show their production possibilities Balls (per hour) Tom allocates all his resources and produces 2 rackets and 20 balls an hour. Abby allocates all her resources and produces 2 rackets and 40 balls an hour. Tom\'s PPF Abby\'s PPF Rackets (per hour) Rackets (per hour) Tom\'s opportunity cost of a racket is balls. Abby\'s opportunity cost of a racket is balls. In the production of balls OA. Abby; Tom; Tom OB. Tom:; Abby; Tom OC. Abby; Tom; Abby OD. Neither Abby nor Tom; the other person; no one OE. Tom; Abby; Abby has a lower opportunity cost than--and has a comparative advantage. Click to select your answer(s).

Solution

1.Tom\'s opportunity cost of Rocket is 10 balls.

2. Abby\'s opportunity cost of Rocket is 20 balls.

3.In the production of balls Abby has lower opportunity cost than Tom and Abby has comparative advantage.

4. In the production of Rocket Tom has lower opportunity cost than Abby and Tom has comparative advantage.