Consider the following information about the production of two goods,X and Y,in two countries,A and B:
∙ In Country A it takes Xa units of resources to produce one unit of X and Ya units of resources to produce one unit of Y.
∙ In Country B it takes Xb units of resources to produce one unit of X and Yb units of resources to produce one unit of Y.
∙ Assume the amount of resources used to produce the goods in the two countries can be compared unambiguously.
-Refer to Table 32-1.If
is less than
,we can conclude with certainty that
A) The opportunity cost of producing good X in Country A is less than in Country B.
B) Country A has a comparative advantage in the production of good X.
C) Country A has an absolute advantage in the production of good X.
D) The price of good X in Country A is less than the price in Country B.
E) The opportunity cost of producing good X in Country A is higher than in Country B.
Correct Answer:
Verified
Q3: There will be no gains from specialization
Q4: Trade,whether between individuals or nations,generally promotes
A)self-sufficiency.
B)specialization.
C)lower living
Q6: The concept of "comparative advantage" refers to
Q7: The existence of "absolute advantage"
A)implies that there
Q9: Consider two countries that can produce rice
Q11: Consider a country that is initially autarkic
Q11: There will be no gains from specialization
Q12: A country that engages in no foreign
Q14: The increases in a nation's output and
Q19: The existence of any "gains from trade"
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents