Catherine Zulueta
2.2.5 Practice
AP Microeconomics
1. Understanding the difference between absolute and comparative advantage is not easy.
Define absolute advantage and comparative advantage in your own words. (10 points)
Absolute advantage is when an individual or nation can produce a good or service more
efficiently than another group by using fewer resources. Comparative advantage is when an
individual or nation can produce goods and services at lower opportunity costs, with less
sacrifices than others.
2. Alex and Edgar are police detectives in the seaside town of Marina. Theyíre both
applying for the Captain position that recently opened. The captainís job is mostly
administrative and isnít directly related to the capture and conviction of criminals. Alex is
a very good officer. He has a high rate of apprehension and conviction of criminals on
the cases he works on. Alex also does an excellent job writing up reports on the cases
he deals with. Edgar, on the other hand, is not very good at solving crimes or handling
paperwork. Heís been on the police force for a number of years, as Alex has, but he
excels at nothing. Suppose youíre the police commissioner. Using the economic
concepts of absolute and comparative advantage, state whom you will promote to the
Captainís job, Alex or Edgar. Explain your choice. (10 points)
I would promote Alex to the Captain’s job. This is because Alex, as stated, works efficiently.
Working efficiently and using less resources such as time shows that Alex has an absolute
advantage over Edgar. When Edgar works, he does not contribute much and spends time on a
job he is not good at when he could be doing something else. Thus, Alex also has a
comparative advantage over Edgar.
3. A society in which the producers in the economy specialize will have a greater
production potential than a society without specialization. List and explain the three
things that specialization does to increase production. (15 points)
The three things specialization does to increase production are increasing production,
economies of scale, and improved quality of goods and services. It increases production as
there is an increase of goods and services that are produced, especially compared to a nation
who is not specializing. Specialization also has more efficiently used resources and the cost of
making goods will decrease (economies of scale). This will lead to profit. Specialization
improves quality of goods and services, as the workers are now working efficiently and well
because they have perfected their craft.
4. Economic Growth
2.2.5 Practice
AP Microeconomics
1. Understanding the difference between absolute and comparative advantage is not easy.
Define absolute advantage and comparative advantage in your own words. (10 points)
Absolute advantage is when an individual or nation can produce a good or service more
efficiently than another group by using fewer resources. Comparative advantage is when an
individual or nation can produce goods and services at lower opportunity costs, with less
sacrifices than others.
2. Alex and Edgar are police detectives in the seaside town of Marina. Theyíre both
applying for the Captain position that recently opened. The captainís job is mostly
administrative and isnít directly related to the capture and conviction of criminals. Alex is
a very good officer. He has a high rate of apprehension and conviction of criminals on
the cases he works on. Alex also does an excellent job writing up reports on the cases
he deals with. Edgar, on the other hand, is not very good at solving crimes or handling
paperwork. Heís been on the police force for a number of years, as Alex has, but he
excels at nothing. Suppose youíre the police commissioner. Using the economic
concepts of absolute and comparative advantage, state whom you will promote to the
Captainís job, Alex or Edgar. Explain your choice. (10 points)
I would promote Alex to the Captain’s job. This is because Alex, as stated, works efficiently.
Working efficiently and using less resources such as time shows that Alex has an absolute
advantage over Edgar. When Edgar works, he does not contribute much and spends time on a
job he is not good at when he could be doing something else. Thus, Alex also has a
comparative advantage over Edgar.
3. A society in which the producers in the economy specialize will have a greater
production potential than a society without specialization. List and explain the three
things that specialization does to increase production. (15 points)
The three things specialization does to increase production are increasing production,
economies of scale, and improved quality of goods and services. It increases production as
there is an increase of goods and services that are produced, especially compared to a nation
who is not specializing. Specialization also has more efficiently used resources and the cost of
making goods will decrease (economies of scale). This will lead to profit. Specialization
improves quality of goods and services, as the workers are now working efficiently and well
because they have perfected their craft.
4. Economic Growth
