Question 1

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is:

Accepted Answer

To determine comparative advantage, we need to look at the opportunity cost of producing one unit of each good. In this case, the opportunity cost of producing one pair of gloves in the United States is 6 radishes (300 radishes/50 gloves), while the opportunity cost of producing one pair of gloves in Bangladesh is 2 radishes (200 radishes/100 gloves). Therefore, the opportunity cost of gloves is higher in the United States, and the United States has a comparative advantage in growing radishes instead.

Question 2

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Accepted Answer

The answer of Suppose an American worker can make 50...

Question 3

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. What are their respective opportunity costs of one pair of gloves?

Accepted Answer

The opportunity cost of producing one pair of gloves for the American worker is 300 radishes divided by 50 pairs of gloves, which equals 6 radishes per pair of gloves. For the Bangladeshi worker, it's 200 radishes divided by 100 pairs of gloves, resulting in 2 radishes per pair of gloves.

Question 4

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 5

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

Accepted Answer

The answer of Suppose that a worker in Country A...

Question 6

If a country has an absolute advantage at producing one good, which of the following is true?

Accepted Answer

An absolute advantage means that a country can produce more of a certain good given the same resources as another country. Therefore, choice D is true. However, having an absolute advantage in one good does not necessarily mean that the country has a comparative advantage in both goods (choice B) or that it cannot have an absolute advantage in the other good (choice A).

Question 7

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Accepted Answer

The opportunity cost of producing one pair of shoes in the United States is the amount of apples that could have been produced instead. Since the American worker can produce 20 pairs of shoes or 100 apples per day, the opportunity cost of producing one pair of shoes is 100 apples / 20 pairs of shoes = 5 apples for each pair of shoes.

Question 8

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for Canada is:

Accepted Answer

The opportunity cost for Canada to produce 1 pair of shoes is the amount of apples it could have produced instead, which is 20 apples / 10 pairs of shoes = 2 apples per pair of shoes.

Question 9

Suppose that, given the same number of workers, the United States can produce five times as many computers or ten times as many airplanes as Mexico. Which of the following statements is true?

Accepted Answer

The United States can produce more of both goods (computers and airplanes) with the same number of workers than Mexico, indicating an absolute advantage in producing both goods.

Question 10

Suppose that only two goods are produced in an economy. If a country possesses a comparative advantage at producing one good, then it:

Accepted Answer

Possessing a comparative advantage at producing one good does not necessarily mean that a country must also have a comparative advantage at producing the other good. Comparative advantage is about being the most efficient at producing a good relative to another country, so it is possible for a country to be more efficient producing one good but not necessarily the other.

Question 11

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Accepted Answer

Bangladesh has a comparative advantage in producing gloves since one Bangladeshi worker can produce 100 pairs of gloves, while an American worker can only produce 50 pairs. This means it is more efficient for Bangladesh to produce gloves than radishes. Likewise, it is more efficient for the US to produce radishes than gloves since one US worker can produce 300 radishes, while one Bangladeshi worker only produces 200 radishes. Therefore, it is more beneficial for countries to specialize in producing goods in which they have a comparative advantage and trade with other countries, rather than trying to produce all goods themselves.

Question 12

Suppose an American worker can make 100 nets or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 nets or catch 400 fish per day. Which of the following statements is true?

Accepted Answer

The answer of Suppose an American worker can make 100...

Question 13

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost of a pair of shoes is _____ for the United States than Canada, so Canada has a(n)_____ advantage at producing shoes.

Accepted Answer

The opportunity cost of a pair of shoes is 5 apples for the United States (100/20) and 2 apples for Canada (20/10). This means that for the US to produce 1 pair of shoes, it has to give up producing 5 apples, while for Canada to produce 1 pair of shoes, it only has to give up producing 2 apples. Therefore, Canada has a comparative advantage in producing shoes.

Question 14

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Accepted Answer

The United States has an absolute advantage in producing both televisions and potatoes because it can produce more of each good with the same number of workers than Chile can.

Question 15

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost of one pair of shoes for the United States is _____, while the opportunity cost of one pair of shoes for Canada is ______.

Accepted Answer

The opportunity cost of one pair of shoes in the United States is 5 apples (100 apples/20 pairs of shoes), while the opportunity cost of one pair of shoes in Canada is 2 apples (20 apples/10 pairs of shoes). Therefore, the United States has a comparative advantage in shoe production and Canada has a comparative advantage in apple production. If the United States focuses on producing shoes and trades with Canada for apples, both countries can benefit from the exchange.

Question 16

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 17

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Canada's opportunity cost of producing a pair of shoes is _____ than the United States, so Canada should specialize in _____ production.

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 18

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Accepted Answer

The United States has an absolute advantage in producing both shoes and apples because an American worker can produce more of both goods per day than a Canadian worker.

Question 19

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce _____ because it has a(n)_____ and should _____.

Accepted Answer

According to the principle of comparative advantage, the United States should specialize in producing the good in which it has a lower opportunity cost. In this case, the opportunity cost of producing one pair of shoes in the United States is 5 apples (100/20), while the opportunity cost of producing one pair of shoes in Canada is 2 apples (20/10). Therefore, the United States has a comparative advantage in growing apples, while Canada has a comparative advantage in producing shoes. Thus, the United States should focus on producing apples and trade for shoes with Canada. Choice D is the only option that reflects this principle.

Question 20

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Accepted Answer

To determine which country has a comparative advantage in producing each good, we need to look at the opportunity cost of producing each good in each country. The opportunity cost is what each country gives up of one good in order to produce more of the other. 
For the US, the opportunity cost of producing 1 pair of gloves is 6 radishes (300/50), while for Bangladesh, the opportunity cost of producing 1 pair of gloves is 2 radishes (200/100). This means that Bangladesh has a lower opportunity cost of producing gloves than the US, and therefore has a comparative advantage in producing gloves. 
Similarly, the opportunity cost of producing 1 radish for the US is 1/6 pairs of gloves, while for Bangladesh it is 1/2 pairs of gloves. This means that the US has a lower opportunity cost of producing radishes, and therefore has a comparative advantage in producing radishes. 
Since the question asks about absolute advantage, we can see that the US can produce more gloves or radishes than Bangladesh in a day, but this does not necessarily mean it has an absolute advantage. Therefore, the correct answer is D: The US has an absolute advantage at producing radishes, but not gloves.

Quiz 2: Specialization and Exchange

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is:

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. What are their respective opportunity costs of one pair of gloves?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

If a country has an absolute advantage at producing one good, which of the following is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for Canada is:

Suppose that, given the same number of workers, the United States can produce five times as many computers or ten times as many airplanes as Mexico. Which of the following statements is true?

Suppose that only two goods are produced in an economy. If a country possesses a comparative advantage at producing one good, then it:

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Suppose an American worker can make 100 nets or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 nets or catch 400 fish per day. Which of the following statements is true?

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce ___ because it has a(n) _ and should ___.

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Quiz 2: Specialization and Exchange

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is:

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. What are their respective opportunity costs of one pair of gloves?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

If a country has an absolute advantage at producing one good, which of the following is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for Canada is:

Suppose that, given the same number of workers, the United States can produce five times as many computers or ten times as many airplanes as Mexico. Which of the following statements is true?

Suppose that only two goods are produced in an economy. If a country possesses a comparative advantage at producing one good, then it:

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Suppose an American worker can make 100 nets or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 nets or catch 400 fish per day. Which of the following statements is true?

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce _____ because it has a(n) _____ and should _____.

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce ___ because it has a(n) _ and should ___.