Exploring Absolute and Comparative Advantage

Who has the absolute advantage in photography before the new oven?

• Neither

• Jack

• Jill

• Both

What does Jack's new pizza oven allow him to do?

• Increase demand

• Reduce costs

• Take more pictures

• Make six pizzas an hour

What is the opportunity cost for Jill per pizza in terms of pictures?

• Four pictures

• Six pictures

• Three pictures

• Five pictures

Who has the comparative advantage in making pizzas?

• Both

• Neither

• Jack

• Jill

What is the opportunity cost for Jack per photograph in terms of pizza?

• 15% of a pizza

• 30% of a pizza

• 25% of a pizza

• 20% of a pizza

Why is Jill's pricing of pizzas significant in economic terms?

• It is fixed by the government

• It is lower than cost

• It is based on cost

• It reflects demand

What economic concept explains why companies might manufacture overseas?

• Absolute advantage

• Market demand

• Comparative advantage

• Price elasticity

According to the lesson, what is NOT a direct function of the ability to produce?

• Supply

• Price

• Cost

• Demand

What does the American factory's production capability suggest about its advantages?

• Absolute advantage

• Cost advantage

• Comparative advantage

• No advantage

What key concept affects opportunity cost as discussed in the lesson?

• Scarcity

• Supply

• Utility

• Demand