Hi could you please answer these questions thank you ! Q41Suppose that Kayla and Josel trade only with each other, and agree to the following terms oftrade: 5 units of food in exchange for 3 units of luxury goods. Additionally, Kayla consumes asmany units of luxury goods as she can. Which of the following statement(s) is(are) NOT true?O A. Kayla's point of production is 10 units of food and 0 luxury goods.O B. Josel's point of production is O units of food for 10 luxury goods.O C. Josel has an absolute advantage in the production of luxury goods.D. Kayla has a comparative advantage in producing food.O E. None of the above.Save AnswerQ42Erhan and Panikos produce hamburgers (H) and steaks (S). Suppose that the Erhan's PPF isdefined by 950QH +425Qs = 1900. What is the opportunity cost of one hamburger?O A. 2 steaks.O B. ½ steak.C. 3 steaks.O D. It depends on which axis the quantity of hamburgers is located.O E. None of the above.Save AnswerQ43Erhan and Panikos produce hamburgers (H) and steaks (S). Suppose that Erhan's PPF is flatterthan Panikos' PPF, with the quantity of hamburgers on the horizontal axis. Given thisinformation, which of the following can you conclude?O A. The opportunity cost of hamburgers is lower for Erhan than for Panikos.O B. The relative price of hamburgers is lower for Erhan than for Panikos.O C. Erhan has a comparative advantage in hamburgers.O D. Panikos has a comparative advantage in hamburgers.O E. Both statements A and C are correct.

Answered: Q41 Suppose that Kayla and Josel trade…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 8P

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Hi could you please answer these questions thank you !

Q41
Suppose that Kayla and Josel trade only with each other, and agree to the following terms of
trade: 5 units of food in exchange for 3 units of luxury goods. Additionally, Kayla consumes as
many units of luxury goods as she can. Which of the following statement(s) is(are) NOT true?
O A. Kayla's point of production is 10 units of food and 0 luxury goods.
O B. Josel's point of production is O units of food for 10 luxury goods.
O C. Josel has an absolute advantage in the production of luxury goods.
D. Kayla has a comparative advantage in producing food.
O E. None of the above.
Save Answer
Q42
Erhan and Panikos produce hamburgers (H) and steaks (S). Suppose that the Erhan's PPF is
defined by 950QH +425Qs = 1900. What is the opportunity cost of one hamburger?
O A. 2 steaks.
O B. ½ steak.
C. 3 steaks.
O D. It depends on which axis the quantity of hamburgers is located.
O E. None of the above.
Save Answer
Q43
Erhan and Panikos produce hamburgers (H) and steaks (S). Suppose that Erhan's PPF is flatter
than Panikos' PPF, with the quantity of hamburgers on the horizontal axis. Given this
information, which of the following can you conclude?
O A. The opportunity cost of hamburgers is lower for Erhan than for Panikos.
O B. The relative price of hamburgers is lower for Erhan than for Panikos.
O C. Erhan has a comparative advantage in hamburgers.
O D. Panikos has a comparative advantage in hamburgers.
O E. Both statements A and C are correct.

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Absolute advantage refers to the ability to produce more goods using same resources or same quantity of goods with lesser resources than the competitor. Comparative advantage refers to the ability to produce goods and services at a lower opportunity cost than the competitor.

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