According to the table above determine which country has the absolute advantage in corn and which in soybeans. In addition, determine which country has the comparative advantage in corn and which in soybeans
Make sure to support your answer by deriving the opportunity costs of each.
Canada has the absolute advantage in the production of corn and Mexico has the absolute advantage in the production of soybeans. In addition, Canada also has a comparative advantage in the production of corn and Mexico has a comparative advantage in the production of soybeans. The reason is that the opportunity cost of corn in Canada is ¼ of a soybean while in Mexico the opportunity cost of corn is 5 soybeans. By taking the reciprocal of each the opportunity costs of soybean are 4 corn for Canada and 1/5 corn for Mexico.
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Economies with higher expected inflation rates have short-run Phillips curves that are
A) further to the right. B) upward sloping. C) further to the left. D) closer to being horizontal. E) always vertical.
Is every product produced in the United States included in U.S. gross domestic product?
What will be an ideal response?
If Y>C+I+G but Md= Ms, then
a. interest rates must rise and output must fall. b. both interest rates and output must fall. c. interest rates must fall and output must rise. d. both interest rates and output must rise. e. none of the above.
When the amount supplied is greater at each price, there is a(n)
A. upward movement along the supply curve. B. downward movement along the supply curve. C. leftward shift in the supply curve. D. rightward shift in the supply curve.