The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. Which of the following statements is true? Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. The United Kingdom has a comparative advantage in the production of corn.
B. The United Kingdom has a comparative advantage in the production of umbrellas.
C. The United Kingdom has a comparative advantage in the production of both goods.
D. The United Kingdom has an absolute advantage in the production of umbrellas.
Answer: B
You might also like to view...
Firms that extend credit to borrowers using funds raised from savers are called:
A. bond dealers. B. central banks. C. financial intermediaries. D. stock brokers.
The total return that the owner of a stock receives is the value of the dividends received minus the capital gain or loss.
Answer the following statement true (T) or false (F)
What is adverse selection? Give an example and explain why it is a problem
What will be an ideal response?
The price of domestic goods in terms of foreign goods is referred to as the
A) nominal exchange rate. B) real exchange rate. C) relative inflation rate. D) purchasing power parity rate.