Assume that the farmer and the rancher each has 24 labor hours available. If each person spends all his time producing the good in which he has a comparative advantage and trade takes place at a price of 1 pound of pork for 2 pounds of tomatoes, then
A. the farmer will gain from this trade, but the rancher will not.
B. the rancher will gain from this trade, but the farmer will not.
C. neither the farmer nor the rancher will gain from this trade.
D. the farmer and the rancher will both gain from this trade.
Ans: B. the rancher will gain from this trade, but the farmer will not.
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Assume that Figure 4-16 shows the supply of soda. An increase in the price of syrup used in the production of soda will shift supply from
A. S1to S2. B. S2to S1. C. S2to S3. D. S1to S3.
Cashing out capital gains in Virtual Currency System #3 (i.e., turning virtual capital gains into real world currencies) causes the nation's:
a. Monetary base to remain the same. b. M2 money supply to fall. c. M2 money multiplier to fall. d. M2 money supply to rise.
A country can have a comparative advantage in the production of a good, even if it does not have an absolute advantage in the production of that good
a. True b. False Indicate whether the statement is true or false
A schedule which shows the various amounts of a product producers are willing and able to produce at each price in a series of possible prices during a specified period of time is called:
a. Quantity supplied b. Supply c. Quantity demanded d. Demand