A Level Economics (9708)•9708/12/O/N/21
Explanation
Comparative advantage from lowest opportunity cost of biscuits Steps:
- Compute opportunity cost of 1 biscuit for each worker: cakes forgone = max cakes / max biscuits per hour.
- Laura: 5/10 = 0.5 cakes per biscuit.
- Mo: 6/8 = 0.75; Nathan: 4/6 ≈ 0.67; Omar: 3/4 = 0.75.
- Lowest cost identifies greatest comparative advantage in biscuits.
Why A is correct:
- Laura's opportunity cost (0.5 cakes per biscuit) is lowest, defining comparative advantage as lowest forgone alternative.
Why the others are wrong:
- B. Mo: Opportunity cost (0.75) exceeds Laura's.
- C. Nathan: Opportunity cost (0.67) exceeds Laura's.
- D. Omar: Opportunity cost (0.75) exceeds Laura's.
Final answer: A
Topic: Scarcity, choice and opportunity cost
Practice more A Level Economics (9708) questions on mMCQ.me