Use the following production possibilities tables to answer the next question.Germany's Production Possibilities ABCDEFAutos (millions)048121620Chemicals (millions)4032241680United States' Production Possibilities ABCDEFAutos (millions)03691215Chemicals (millions)60483624120Assume that prior to specialization and trade Germany and the United States both produced combination C. Now if each nation specializes according to its comparative advantage, the resulting gains from specialization and trade will be
A. 6 million units of autos and 8 million units of chemicals.
B. 6 million units of autos.
C. 8 million units of autos and 6 million units of chemicals.
D. 8 million units of autos.
Answer: B
You might also like to view...
Unemployment in 1939, after a decade of recession and depression, still exceeded 10 percent
Indicate whether the statement is true or false
In the case of a negative externality, the social marginal cost will
a. exceed the private marginal cost. b. be equal to private marginal cost. c. fall short of private marginal cost. d. bear no significant relation to private marginal cost.
Standardized goods are:
A. goods which are regulated by government quality standards. B. goods which are easily substitutable and not distinguishable. C. the most common type of good produced. D. those sold in markets with regulated price systems.
Which of the following statements is correct concerning the burden of a tax imposed on candles?
a. Sellers bear the entire burden of the tax. b. We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination. c. Buyers bear the entire burden of the tax. d. Buyers and sellers share the burden of the tax.