In Table 17.1, the United States has 
A. an absolute advantage but not a comparative advantage in coffee.
B. an absolute and comparative advantage in both goods.
C. an absolute and comparative advantage in coffee.
D. an absolute and comparative advantage in apples.
Answer: D
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Income taxes cause _____
a. individuals to substitute towards leisure b. individuals to substitute towards jobs with more in-kind benefits c. individuals to work in underground markets d. all of the above
When one is considering costs of taking a trip in their car, the average cost per mile includes some items of cost that are not included in the marginal cost of a mile driven. This statement is
A. absurd because marginal costs do not apply to mileage costs. B. always false. C. always true. D. sometimes true and sometimes false depending on the circumstances.
Empirical evidence indicates that higher real interest rates lead to ________ in savings.
A. no change in B. modest increases C. modest decreases D. substantial increases
The benefits to specialization are even greater when two trading partners have:
A. large differences in opportunity costs. B. very similar opportunity costs. C. absolute advantages in producing the same goods. D. similar consumption preferences.