Ed and wendy decide to make extra money working by painting names on coffee mugs and making sketches. ed can paint 6 mugs or draw 2 sketches per hour. wendy can paint 8 mugs or make 3 sketches per hour. wendy has

a. an absolute advantage over ed.
b. greater natural resources than ed.
c. more specialized production than ed.
d. a comparative advantage over ed.

The correct answer is the option A: an absolute advantage over Ed.

Explanation:

To begin with, the concept of absolute advantage established by Adam Smith in his famous book The Wealth Of Nations of 1776 refers to the ability of producing more of a good in comparison with other competitors that have the same resources. Moreover, the principle states that the person or nation that has absolute advantage over the other is the one that produces a greater quantity of the good or service than the other party.  

Secondly, it is understandable that in the case where Wendy can paint more mugs or make more sketches per hour with the same resources than Ed, then Wendy has an absolute advantage over Ed.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.