Suppose that country X can produce 1,000 pounds of flour per hour, or catch 500 pounds of fish per hour. In contrast, country Y can produce 1,800 pounds of flour per hour, or catch 300 pounds of fish per hour. If both countries specialize in their comparative advantage and trade, by how much combined output of fish and flour per hour be greater than if there were no trade and the countries divide
an hour of time equally between each output?
a. 200 pounds of flour and 200 pounds of fish.
b. 400 pounds of flour and 100 pounds of fish.
c. 50 pounds of flour and 50 pounds of fish.
d. 160 pounds of flour and 200 pounds of fish.
b
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A demand curve generally
a. is a straight horizontal line. b. is a straight vertical line. c. slopes downward to the right. d. slopes downward to the left.
The “law” of diminishing returns
A. is deduced from the basic biochemical relationship of agricultural theory. B. was constructed as the basis of observation during experiments on the impact of fertilizer on output in the 1930s. C. is based on regular observations of input-output relationships over the last two centuries. D. is borrowed from physical laws related to conversion of matter and energy.
Which of the following is true?
a. A stockholder owns part of the corporation. b. A stockholder has loaned money to the corporation. c. A stockholder is owed money by the corporation. d. A stockholder must be consulted on all major decisions.
Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000 . the firm's marginal cost equals $15 and its average total cost equals $11 . The firm sells its output for $12 per unit. At Q = 999, the firm's total cost amounts to
a. $10,985. b. $10,990. c. $10,995. d. $10,999.