Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 3 yards of fabric or 9 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 6 yards of
fabric or 12 bushels of wheat. Based on this information
A) beneficial trade is absolutely impossible between the two countries.
B) the United States will benefit from trading but Japan will not.
C) both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric.
D) Japan should specialize in both products.
Answer: C
You might also like to view...
The terms of trade (TOT) is defined as
A) (index of export prices)/(index of import prices). B) (home-country currency)/(foreign-country currency). C) . D) E) having a competitive advantage over other nations.
An improvement in technology would result in
A) upward shifts of MC and reductions in output. B) upward shifts of MC and increases in output. C) downward shifts of MC and reductions in output. D) downward shifts of MC and increases in output. E) increased quality of the good, but little change in MC.
Consumption is spending by: a. households on goods and services
b. households on capital goods and inventories. c. businesses on corporate social responsibility initiatives. d. government on subsidizing consumption goods.
Which of the following is NOT a criticism of the CPI?
A. The CPI does not account for the way consumer substitute less expensive items for higher priced items. B. The CPI ignores changes in consumption patterns that occur between years in which it revises the index. C. The CPI ignores the changes of prices of goods that firms produce and sell to each other. D. The CPI ignores successful new products until long after they have been introduced.