Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each
year, then each country's maximum consumption of new radios and televisions per year will be
a. 100 radios, 300 televisions in Radioland and 300 radios, 100 televisions in Teeveeland.
b. 300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland.
c. 200 radios, 100 televisions in Radioland and 100 radios, 200 televisions in Teeveeland.
d. 300 radios, 100 televisions in Radioland and 100 radios, 400 televisions in Teeveeland.
b
You might also like to view...
What is "crowding out"? Why is it important in discussions of fiscal policy? Use an appropriate diagram to illustrate your answer
In the production of goods and services, trade-offs exist because
A) not all production is efficient. B) society has only a limited amount of productive resources. C) we have abundant resources to choose from. D) human wants and needs are limited at a particular point in time.
When a resource has a perfectly inelastic supply curve
A) the amount of economic rent for this resource is determined by its supply. B) the amount of economic rent for this resource is determined by demand for the resource. C) the amount of economic rent for this resource is determined by the government. D) there is no economic rent being earned by this resource.
The amount of calendar time associated with the long run:
A. is less than that associated with the immediate market period. B. is one year by definition. C. varies from industry to industry. D. is the same for all firms.