Refer to Table 7-4
a. Which country has an absolute advantage in the production of both light bulbs and flash drives?
b. Which country has a comparative advantage in the production of light bulbs?
c. Which country has a comparative advantage in the production of flash drives?
a. Neither country has an absolute advantage in the production of both products.
b. Mexico has a comparative advantage in the production of light bulbs.
c. Canada has a comparative advantage in the production of flash drives.
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The purchasing power parity theory helps explain long-run trends in exchange rates, but not short-run fluctuations
a. True b. False
A firm's resource at a given point in time can be defined as:
a. those investments made by it in profitable organizations. b. those tangible and intangible assets attached to it semipermanently. c. its ability to control the market price. d. its lobbying ability built over years of experience.
Why do most economists favor emissions taxes and transferable pollution rights over compliance standards as pollution deterrents?
The market produces too much of a good with ______.
a. adverse selection b. negative externalities c. positive externalities d. asymmetric information