Suppose that in the United States, the opportunity cost of producing a motor engine is 4 auto bodies. In Canada, the opportunity cost of producing a motor engine is 2 auto bodies
a. What is the opportunity cost of producing an auto body for the United States?
b. What is the opportunity cost of producing an auto body for Canada?
c. Which country has a comparative advantage in the production of auto bodies?
d. Which country has a comparative advantage in the production of motor engines?
a. For the United States, the opportunity cost of producing an auto body is 1/4 of a motor engine.
b. For Canada, the opportunity cost of producing an auto body is 1/2 of a motor engine.
c. The United States has a comparative advantage in the production of auto bodies.
d. Canada has a comparative advantage in the production of motor engines.
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Which of the following is an example of a normative statement?
A. The American Recovery and Reinvestment Act should not have been passed during the Great Recession. B. Unemployment soared to 25 percent during the Great Depression. C. An increase in alcohol taxes will reduce the number of drunk driving accidents. D. Great Britain has fewer hospital beds per capita today than they did in 1948.
The graph shown portrays a subsidy to buyers. Once the subsidy is in place, the buyers pay _____ and the sellers receive ________; the difference is ___________.
A. $24; $40; the amount of the subsidy
B. $30; $46; the amount of the subsidy
C. $40; $24; the amount of the subsidy
D. $24; $40; the amount of government revenue
Refer to Figure 5.2, which shows a family of average cost curves. The average variable cost curve is represented by:
A. Curve 1. B. Curve 2. C. Curve 3. D. the vertical sum of curve 2 and curve 3.
In a mixed open economy, which of the following all affect the equilibrium GDP in the same direction?
A. C a , I g , S a , and M. B. S a , T, and M. C. I g , T, and C a . D. S a , I g , and X.