Deck 7: Comparative Advantage and the Gains From International Trade

Question 1

Domestically produced goods and services sold to other countries are referred to as

A)exports.
B)imports.
C)transfer payments.
D)capital outflow.

Answer 1

A

Question 2

Despite the Obama administration's support of the Trans-Pacific Partnership (TPP),the AFL-CIO labor union has argued that the TPP will not

A)create jobs.
B)protect the environment.
C)ensure safe imports.
D)all of the above

Answer 2

D

Question 3

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

A)both a U.S.and a French import.
B)a U.S.import and a French export.
C)a U.S.export and a French import.
D)neither an export nor an import for either country.

Answer 3

C

Question 4

Over the past several decades there has been rapid growth in international trade.This growth has been due to all but one of the following factors.Which factor has not contributed to the growth of international trade?

A)the spread of reliable communications
B)a change in the tariffs charged on many goods
C)a reduction in shipping costs
D)favorable changes in government policies

Question 5

Although the United States is the second largest exporting country,international trade is less important to the United States than it is to most other countries.

Question 6

At the time policymakers debated the Trans-Pacific Partnership,the United States imposed ________ on the value of imported shoes and shoe parts.

A)no tariffs
B)tariffs of 1.5 to 12.5 percent
C)tariffs of 25 to 67.5 percent
D)tariffs of 95 percent

Question 7

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

A)both a U.S.and an Italian import.
B)a U.S.import and an Italian export.
C)a U.S.export and an Italian import.
D)neither an export nor an import for either country.

Question 8

A tax imposed by a government on imports of a good into a country is called

A)an import levy.
B)an import fine.
C)a tariff.
D)an import quota.

Question 9

U.S.factories produce ________ of the shoes New Balance sells in the United States.

A)none
B)about 25 percent
C)roughly half
D)about 75 percent

Question 10

Twenty-nine countries in Europe have formed the European Union (EU).After the EU was formed it

A)eliminated all tariffs among its member countries.
B)completed a trade treaty (NAFTA)that reduced tariff rates between the EU and North American countries.
C)greatly decreased imports and exports among its member countries.
D)barred imports of 747 jumbo jets by its member countries;all EU countries must now buy jets from Airbus,a European company.

Question 11

Which of the following statements is false?

A)Japan is less dependent on foreign trade than is the United States.
B)Imports and exports account for over one-half of the GDP of the Netherlands.
C)China is the leading exporting country,accounting for 10.3 percent of total world exports.
D)Because the cost of labor used on farms is so high,the United States exports very little of its wheat,rice,and corn crops.

Question 12

Which of the following countries is not one of the top three exporting countries in the world?

A)China
B)Germany
C)South Korea
D)the United States

Question 13

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

A)almost all jobs;economic growth
B)well over half of the jobs;price decreases
C)relatively few jobs;job losses
D)no jobs;increased productivity

Question 14

As a percentage of GDP,imports are greater than exports for which of the following countries?

A)Germany
B)Italy
C)the Netherlands
D)the United States

Question 15

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

A)the Pacific Trade Association.
B)Trade Without Borders.
C)NAFTA.
D)the Western Trade Union.

Question 16

In the 1930s the United States charged an average tariff rate

A)that was less than its average tariff rate in 2007.
B)that cut its exports to other countries by 50 percent.
C)that was less than 2 percent.
D)that exceeded 50 percent.

Question 17

The Trans-Pacific Partnership (TPP)is an agreement between the United States and ________ that was meant to reduce trade barriers.

A)eleven other countries
B)the European Union
C)China
D)South America

Question 18

Which of the following statements is false?

A)Exports benefit trading countries because exports create jobs.Imports do not benefit trading countries because they result in a loss of jobs.
B)Each year the United States exports about 50 percent of its wheat crop and 20 percent of its corn crop.
C)Most of the leading exporting countries are large,high-income countries.
D)Not all sectors of the U.S.economy are affected equally by international trade.

Question 19

Imports are goods and services bought domestically

A)and produced domestically.
B)but produced in other countries.
C)and resold at a profit.
D)and not subject to tariffs.

Question 20

Which of the following statements about the importance of trade to the U.S.economy is false?

A)Since 1970,both exports and imports have steadily increased as a fraction of U.S.gross domestic product.
B)Overall,about 20 percent of U.S.manufacturing jobs depend directly or indirectly on exports.
C)The United States is the second largest exporter in the world.
D)The U.S.economy is highly dependent on international trade for growth in its gross domestic product.

Question 21

Table 7-1
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced.
Refer to Table 7-1.Use the table above to select the statement that accurately interprets the data in the table.

A)Rob has a comparative advantage in catching fish.
B)Bill has an absolute advantage in catching fish.
C)Bill has a comparative advantage in catching fish.
D)Rob has a comparative advantage in picking berries and catching fish.

Question 22

Table 7-1
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced.
Refer to Table 7-1.Use the table above to select the statement that accurately interprets the data in the table.

A)Bill has a greater opportunity cost than Rob for picking berries.
B)Bill's opportunity cost for catching fish is less than Rob's.
C)Rob has a greater opportunity cost than Bill for picking berries.
D)Bill's opportunity cost for picking berries and catching fish are both greater than Rob's.

Question 23

Table 7-2
Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

A)Madison has a greater opportunity cost than Austin for making tacos.
B)Madison's opportunity cost for making tacos is less than Austin's.
C)Austin has a greater opportunity cost than Madison for making empanadas.
D)Austin's opportunity cost for making tacos and making empanadas are both greater than Madison's.

Question 24

A tariff is a tax imposed by a government on imports.

Question 25

________ is the ability to produce more of a good or service than competitors when using the same amount of resources.

A)Absolute advantage
B)Comparative advantage
C)Trade superiority
D)Trade autarky

Question 26

Imports are goods and services bought domestically but produced in other countries.

Question 27

Table 7-3
Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A)Mateo has a greater opportunity cost than Celeste for making saddles.
B)Mateo's opportunity cost for making saddles is less than Celeste's.
C)Celeste has a greater opportunity cost than Mateo for making saddles.
D)Mateo's opportunity cost for making saddles and making spurs are both greater than Celeste's.

Question 28

Table 7-3
Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A)Mateo has an absolute advantage in making saddles and Celeste has an absolute advantage in making spurs.
B)Mateo has an absolute advantage in making spurs and Celeste has an absolute advantage in making saddles.
C)Mateo has an absolute advantage in making spurs.
D)Celeste has an absolute advantage in making saddles.

Question 29

Table 7-2
Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

A)Madison has an absolute advantage in making tacos and Austin has an absolute advantage in making empanadas.
B)Madison has an absolute advantage in making empanadas and Austin has an absolute advantage in making tacos.
C)Madison has an absolute advantage in making empanadas and tacos.
D)Austin has an absolute advantage in making empanadas and tacos.

Question 30

Table 7-1
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced.
Refer to Table 7-1.Use the table above to select the statement that accurately interprets the data in the table.

A)Rob has an absolute advantage in picking berries and Bill has an absolute advantage in catching fish.
B)Bill has an absolute advantage in picking berries and Rob has an absolute advantage in catching fish.
C)Bill has an absolute advantage in picking berries and catching fish.
D)Rob has an absolute advantage in picking berries and catching fish.

Question 31

Is the value of U.S.exports typically larger or smaller than the value of U.S.imports?

Question 32

Trade that is within a country or between countries is based on the principle of

A)absolute advantage.
B)scarcity.
C)competition.
D)comparative advantage.

Question 33

What are three primary reasons for the growth of international trade over the past 50 years?

Question 34

Table 7-2
Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

A)Madison has a comparative advantage in making empanadas.
B)Austin has a comparative advantage in making tacos.
C)Madison has a comparative advantage in making empanadas and making tacos.
D)Madison has a comparative advantage in making tacos.

Question 35

Today,the United States charges an average tariff rate of less than 1.5 percent.

Question 36

Table 7-1
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced.
Refer to Table 7-1.Use the table above to select the statement that accurately interprets the data in the table.

A)Bill has a comparative advantage in catching fish.
B)Rob has a comparative advantage in picking berries.
C)Rob has a comparative advantage in catching fish and picking berries.
D)Bill has a comparative advantage in picking berries.

Question 37

Table 7-3
Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A)Celeste has a comparative advantage in making spurs.
B)Mateo has a comparative advantage in making spurs.
C)Celeste has a comparative advantage in making saddles and making spurs.
D)Neither Mateo nor Celeste has a comparative advantage in making spurs.

Question 38

Table 7-2
Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

A)Madison has a comparative advantage in making empanadas.
B)Austin has an absolute advantage in making tacos.
C)Austin has a comparative advantage in making empanadas.
D)Austin has a comparative advantage in making empanadas and making tacos.

Question 39

Explain why international trade is less important to the United States than it is to many other countries.

Question 40

Table 7-3
Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A)Mateo has an absolute advantage in making saddles and spurs.
B)Celeste has an absolute advantage in making saddles and spurs.
C)Neither Mateo nor Celeste has an absolute advantage in making saddles.
D)Neither Mateo nor Celeste has an absolute advantage in making spurs.

Question 41

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Question 42

An economic principle that explains why people pursue different occupations is

A)absolute advantage.
B)international trade.
C)comparative advantage.
D)NAFTA.

Question 43

Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia.We can conclude that

A)Australia also has an absolute advantage in producing surfboards relative to New Zealand.
B)Australia has a lower opportunity cost of producing surfboards relative to New Zealand.
C)New Zealand has an absolute disadvantage in producing surfboards relative to Australia.
D)Labor costs are higher for surfboard producers in New Zealand than in Australia.

Question 44

If a country has a comparative advantage in producing a product,it must also have an absolute advantage in producing that product.

Question 45

If Finland has an absolute advantage in the production of two goods compared to Latvia,Finland can still benefit from trade with Latvia.

Question 46

If Norwegian workers are more productive than Albanian workers,then trade between Norway and Albania

A)cannot take place because Norwegian goods and services will be less expensive than Albanian goods and services.
B)will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want.
C)cannot take place until Albanian workers become more productive.
D)can take place only if Albania has an absolute advantage in producing a good or service Norwegian buyers want.

Question 47

Table 7-3
Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

A)Celeste has a comparative advantage in making saddles.
B)Mateo has an absolute advantage in making spurs.
C)Mateo has a comparative advantage in making saddles.
D)Mateo has a comparative advantage in making saddles and making spurs.

Question 48

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden,which of the following would explain this pattern of trade?

A)Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter.
B)The opportunity cost of producing butter in Denmark is higher than the opportunity cost of producing butter in Sweden.
C)Sweden must have an absolute advantage in producing cell phones and Denmark must have an absolute advantage in producing butter.
D)Sweden has a higher opportunity cost of producing cell phones than Denmark,and Denmark has a higher opportunity cost of producing butter.

Question 49

Table 7-4
Output Per Hour of Work
Table 7-4 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada.
Refer to Table 7-4.Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada.

Question 50

Table 7-5
Table 7-5 shows the output per week for pens and pencils by Tran and Farah.
Refer to Table 7-5.Fill in the following table with the opportunity costs of producing bows and arrows for Tran and Farah.

Question 51

Whenever a buyer and a seller agree to trade,both must believe they will be made better off

A)unless the buyer resides in a different country than the seller.International trade may make the buyer or seller worse off.
B)unless one party is richer than the other.
C)only if the buyer and seller live in countries with market economies.
D)whether the buyer and seller live in the same city or different countries.

Question 52

If a country has an absolute advantage in producing a product,it may not have a comparative advantage in producing that product.

Question 53

Table 7-4
Output Per Hour of Work
Table 7-4 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada.
Refer to Table 7-4.
a.Which country has an absolute advantage in the production of both light bulbs and flash drives?
b.Which country has a comparative advantage in the production of light bulbs?
c.Which country has a comparative advantage in the production of flash drives?

Question 54

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,then

A)the average cost of production for sugar cane is lower in Brazil than in Cuba.
B)the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C)the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D)the explicit cost of production for sugar cane is lower in Brazil than in Cuba.

Question 55

Table 7-5
Table 7-5 shows the output per week for pens and pencils by Tran and Farah.
Refer to Table 7-5.
a.Which person has an absolute advantage in the production of pens? Pencils?
b.Which person has a comparative advantage in the production of pens?
c.Which person has a comparative advantage in the production of pencils?

Question 56

Explain whether it is possible for a country to have a comparative advantage in the production of a product without having an absolute advantage in the production of that product.

Question 57

Autarky is a situation in which a country

A)only exports products.
B)only imports products.
C)does not trade with other countries.
D)has no absolute advantage in any production.

Question 58

What does it mean for a country to have a comparative advantage in producing a product?

Question 59

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

A)marginal
B)explicit
C)opportunity
D)implicit

Question 60

Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil.We can conclude that

A)Honduras also has an absolute advantage in producing bananas relative to Brazil.
B)Honduras has a lower opportunity cost of producing bananas relative to Brazil.
C)Brazil has an absolute disadvantage in producing bananas relative to Honduras.
D)Labor costs are higher for banana producers in Brazil than in Honduras.

Question 61

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many belts will Estonia consume?

A)50
B)70
C)90
D)120

Question 62

Countries gain from specializing in producing goods in which they have ________ and trading for goods in which other countries have ________.

A)a comparative advantage;an absolute advantage
B)an absolute advantage;an absolute advantage
C)a comparative advantage;a comparative advantage
D)an absolute advantage;a comparative advantage

Question 63

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many swords will Morocco consume?

A)60
B)75
C)135
D)200

Question 64

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.All of the following are terms of trade that could possibly benefit both countries except

A)2/3 of a belt : 1 sword.
B)4/5 of a belt : 1 sword.
C)7/10 of a belt : 1 sword.
D)1/4 of a belt : 1 sword.

Question 65

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Which country has a comparative advantage in producing swords?

A)Estonia
B)Morocco
C)both countries
D)neither country

Question 66

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.With trade,what is the total gain in sword production?

A)40
B)60
C)100
D)200

Question 67

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Prior to trade,what was the opportunity cost to produce 1 sword in Morocco?

A)1/2 of a belt
B)1 belt
C)1.5 belts
D)2 belts

Question 68

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Prior to trade,what was the opportunity cost to produce 1 belt in Estonia?

A)1/3 of a sword
B)3/5 of a sword
C)1.67 swords
D)5 swords

Question 69

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.With trade,what is the total gain in belt production?

A)20
B)40
C)60
D)120

Question 70

The first discussion of comparative advantage appears in a book written by

A)Adam Smith.
B)Paul Samuelson.
C)David Portugal.
D)David Ricardo.

Question 71

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.All of the following are terms of trade that could possibly benefit both countries except

A)1 belt : 1.25 swords.
B)1 belt : 1.33 swords.
C)1 belt : 1.75 swords.
D)1 belt : 2.25 swords.

Question 72

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many belts will Estonia gain compared to the "without trade" numbers?

A)0
B)10
C)40
D)50

Question 73

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Prior to trade,what was the opportunity cost to produce 1 sword in Estonia?

A)1/3 of a belt
B)3/5 of a belt
C)1.67 belts
D)3 belts

Question 74

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Which country has an absolute advantage in producing belts?

A)Estonia
B)Morocco
C)both countries
D)neither country

Question 75

The terms of trade refers to

A)the rules and regulations that countries must adhere to when trading.
B)the ratio at which a country can trade its exports for imports from other countries.
C)the role of the government in overseeing international trade.
D)a legal document that specifies the trade quantities agreed to by two countries.

Question 76

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many swords will Estonia consume?

A)75
B)100
C)125
D)200

Question 77

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many belts will Morocco consume?

A)60
B)70
C)90
D)120

Question 78

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Which country has a comparative advantage in producing belts?

A)Estonia
B)Morocco
C)both countries
D)neither country

Question 79

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Which country has an absolute advantage in producing swords?

A)Estonia
B)Morocco
C)both countries
D)neither country

Question 80

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
Refer to Table 7-6.Prior to trade,what was the opportunity cost to produce 1 belt in Morocco?

A)1/2 of a sword
B)1 sword
C)1.5 swords
D)2 swords