Suppose the production of 12 tons of copper in the United States requires the same amount of resources as the production of 3 tons of aluminum. In Mexico, 12 tons of copper requires the same amount of resources as 2 tons of aluminum. Implicitly
A. Neither country has a comparative advantage in producing aluminum.
B. Mexico has a comparative advantage in producing copper.
C. Mexico has an absolute advantage in producing copper.
D. The United States has an absolute advantage in producing aluminum.
Answer: B
You might also like to view...
New growth theory holds that choices, and the discoveries that result from them, result in growth that is temporary in nature
Indicate whether the statement is true or false
If fewer cigarettes are consumed with symmetric information than asymmetric information, it follows that
A. with asymmetric information the demand for cigarettes is lower than with symmetric information. B. with symmetric information the demand for cigarettes is lower than with asymmetric information. C. the demand for cigarettes is the same with or without asymmetric information. D. there are more free riders with asymmetric information than symmetric information. E. There is not enough information to answer the question.
Which of the following describes Ralph?
Ralph loves to watch public television but never sends any money to support the local station. a. He is a free rider getting benefits without paying any costs. b. He has a positive externality from television watching. c. He has a negative externality from television watching. d. He is a free rider paying costs without receiving any benefits.
Over time in the long run we expect unplanned inventory expenditure to:
A. be negative as firms will tend to reduce production is they think people won't purchase their product. B. be positive as on average firms tend to be optimistic about sales, but if they don't sell product they store it. C. equal zero as planned inventories should equal actual inventories. D. increase because firms have a hard time figuring out what consumers want.