The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?
A) Gamma
B) Beta
C) Neither country has a comparative advantage.
D) Both countries have the comparative advantage.
A
You might also like to view...
Network externalities
A) prevent the dominance of a market by one firm. B) are created when celebrity endorsements of products lead to a surge in the demand for those products. C) exist when the usefulness of a product increases with the number of consumers who use it. D) can only exist when there are economies of scale.
What happens to the marginal product (MP) of labor when the market price of the good produced increases?
a. Increases proportional to price. b. Decreases proportional to price. c. Stays the same. d. Falls because quantity demanded falls. e. Rises because quantity demanded falls.
"New industries should be protected from older established foreign competitors until they are mature enough to compete on an equal basis." This argument for trade restrictions is called the __________ argument
A) low-foreign-wages B) foreign export-subsidies C) anti-dumping D) infant-industry
By looking at the graphs showing the impact of a positive supply shock on aggregate demand and aggregate supply and on the Phillips curve, we can see that a positive supply shock would ______.
a. increase price levels and RGDP, but decrease inflation rates and unemployment rates
b. increase price levels, RGDP, inflation rates, and unemployment rates
c. decrease price levels, RGDP, inflation rates, and unemployment rates
d. decrease price levels, inflation rates, and unemployment rates, but increase RGDP