Comparative Advantage

What was a significant consequence for the people of Tasmania after they became isolated from mainland Australia?

• They developed advanced new technologies independently.

• Their population grew rapidly due to lack of external threats.

• They lost previously known technologies and missed new innovations.

• They established trade routes with distant islands.

What is the primary benefit of individuals or groups specializing in tasks where they have a comparative advantage and then trading with others?

• It reduces the overall amount of work required.

• It leads to a decrease in total goods and services produced.

• It allows for an increase in total production of goods and services.

• It eliminates the need for innovation.

If Bob can produce 10 bananas or 10 fish in a day, and Ann can produce 10 bananas or 30 fish in a day, what is Ann's opportunity cost for producing one banana?

• 1 fish

• 2 fish

• 3 fish

• 10 fish

If an individual becomes significantly better at producing one good, how does this change affect others who trade with them?

• It makes trade less beneficial for everyone involved.

• It increases the opportunity cost for the improved individual to produce other goods, potentially benefiting trading partners.

• It forces others to also improve their production to remain competitive.

• It has no impact on the trading relationships with others.