The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case:
A. Korea has a comparative advantage in the production of wheat
B. The United States has a comparative advantage in the production of televisions
C. Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States
D. Mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States
C. Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States
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By setting MR = MC, a competitive firm decides to sell 100 units when the market price is $20. The average cost of producing the 100 units is $18 per unit. If the firm has fixed costs of $500, then the firm should
a. shutdown b. expand production c. exit the industry d. increase their price
Which of the following is not a method to reduce the inflationary gap?
A. Increasing government spending B. Reducing transfer payments C. Raising taxes D. Decreasing government expenditure
An outcome is Pareto efficient if:
A) an individual can be made better off without making someone else worse off. B) benefits of the outcome are equally distributed among all the participants. C) no individual can be made better off without making someone else worse off. D) costs of the outcome are equally shared by all the participants.
As measured by the index of openness, the United States is relatively closed, and yet, it was the world's largest exporter in 2007
Indicate whether the statement is true or false