Comparative Advantage and Trade

What is the opportunity cost for Charlie to produce 10 plates?

• 30 cups

• 20 cups

• 15 cups

• 25 cups

What is the opportunity cost for Patty to produce 30 plates?

• 10 cups

• 15 cups

• 20 cups

• 25 cups

Who has the comparative advantage in plates?

• None of the above

• Charlie

• Both have the same advantage

• Patty

Who has the comparative advantage in cups?

• Charlie

• Patty

• Both have the same advantage

• None of the above

What is the opportunity cost of 1 plate for Charlie in terms of cups?

• 2 cups

• 4 cups

• 3 cups

• 1/2 cup

What is the opportunity cost of 1 plate for Patty in terms of cups?

• 2/3 cup

• 1/2 cup

• 1/3 cup

• 1/4 cup

What does Patty specialize in?

• Both cups and plates

• Plates

• Cups

• None of the above

What does Charlie specialize in?

• Both cups and plates

• Plates

• Cups

• None of the above

What is the trading price agreed upon by Charlie and Patty?

• 1 cup for 1 plate

• 2 cups for 3 plates

• 2 cups for 1 plate

• 1 cup for 2 plates

Why does Charlie want to trade cups for plates in the market?

• Because the market price is lower than his opportunity cost

• Because he wants to help Patty

• Because he has no other option

• Because the market price is higher than his opportunity cost