On a typical acre of land, Iowa can produce either 300 pounds of beef or 100 pounds of soybeans in a year. On a typical acre of land, Nebraska can produce 150 pounds of beef or 200 pounds of soybeans. Which of the following is correct?
A) Nebraska should produce soybeans because its opportunity cost of soybeans is lower.
B) Nebraska should produce soybeans because its opportunity cost of soybeans is higher.
C) Iowa should produce soybeans because its opportunity cost of soybeans is lower.
D) Iowa should produce soybeans because its opportunity cost of soybeans is higher.
E) Nebraska and Iowa should divide each acre evenly between soybean and beef production.
A
You might also like to view...
All points on the firm's expansion path
a. give the firm the maximum possible profit. b. minimize the firm's cost of producing some level of output. c. have the same long-run average cost. d. make the marginal product of labor equal to the marginal product of capital.
Refer to figure 4-17. At a price of
For purposes of determining comparative advantage, the cost of producing a good in each of two countries is measured in terms of:
a. metric units only. b. opportunity costs. c. total costs. d. the currency of the importing country. e. the currency of the exporting country.
If potential output exceeds actual output, the aggregate demand curve shifts downward over time.
Answer the following statement true (T) or false (F)