Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two computers with one unit of labor. If France can trade only with Sweden, then the theory of comparative advantage suggests that:
A) France should specialize in producing phones and import computers from Sweden.
B) France should specialize in producing computers and import phones from Sweden.
C) France should produce both phones and computers, and import nothing from Sweden.
D) France should import both phones and computers from Sweden.
Correct Answer:
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Q40: The relationship between trade and specialization is
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Figure: PPF
Q42: According to the theory of comparative advantage,
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Figure: PPF
Q44: The real cost of producing a good
Q46: The theory of comparative advantage is:
A) rarely
Q47: Use the following to answer questions:
Figure: PPF
Q48: Comparative advantage is determined by which of
Q49: Use the following to answer questions:
Figure: PPF
Q50: Which of the following statements shows how
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