Macland can produce 210 sweaters or 30 airplanes. Microland can produce 150 sweaters or 10 airplanes. Since Macland can produce more than Microland,
a. Macland will benefit from trading, but Microland will not as it does not have an absolute advantage.
b. neither country will benefit from trade because Macland has an absolute advantage in both goods.
c. both Macland and Macroland will benefit as the opportunity costs are different.
d. Microland will benefit, but Macroland will not because it has an absolute advantage in both goods.
c. both Macland and Macroland will benefit as the opportunity costs are different.
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Table 7.1 exemplifies the principle of
A) diminishing returns. B) marginal costs. C) full employment equilibrium. D) real vs. nominal costs.
You are running a small yard maintenance business for the summer. What do you expect to happen to the number of yards you can maintain in a day as you add workers if you don't purchase more capital equipment (like mowers and leaf blowers)?
What will be an ideal response?
When the exchange rate falls, in the foreign exchange market the
A) quantity demanded of the currency increases. B) demand for the currency increases. C) quantity demanded of the currency decreases. D) demand for the currency decreases.
If the market demand curve in a perfectly competitive industry shifts right, the demand curve for each existing firm will: a. shift up
b. shift down. c. shift right. d. shift left.