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Rashid [163]
4 years ago
5

If luke can bake bread at a lower opportunity cost than jason, and jason can produce paintings at a lower opportunity cost than

luke, it follows that
a. luke has a comparative advantage in paintings and jason has a comparative advantage in baking bread.


b. both luke and jason have a comparative advantage in baking bread.


c. both luke and jason have a comparative disadvantage in producing paintings.


d. luke has a comparative advantage in baking bread and jason has a comparative advantage in producing paintings.


e. there is not enough information to answer the question.
Business
1 answer:
ankoles [38]4 years ago
8 0

Answer:

The correct answer is option d.

Explanation:

Comparative advantage refers to the situation where an individual, firm or nation can produce a good at a relatively lower cost than its competitors.

Luke can bake bread at a relatively lower opportunity cost while Jason can produce paintings at a relatively lower opportunity cost.

This implies that Luke has a comparative advantage in baking bread and Jason has a comparative advantage in making paintings.

Luke specializes in baking bread and Jason specializes in making paintings.

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Agency conflict arises when ownership is separated from management and management have to take decision to maximize wealth of owner instead of themselves.

Hence when owners are separated from the business is the correct answer.

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Therefore,

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