Suppose that opportunity costs in India and Australia are constant. In India, maximum feasible hourly production rates are either 0.3 unit of cloth or 0.2 unit of food. In Australia, maximum feasible hourly production rates are either 0.5 unit of cloth
or 0.5 unit of food. It is correct to state that
A) India has a comparative advantage in producing cloth.
B) India has a comparative advantage in producing both cloth and wheat.
C) India has no comparative advantage in producing cloth or wheat.
D) Australia has a comparative advantage in producing cloth.
Answer: A
You might also like to view...
What is the main difference between an instrument rule and a targeting rule? Be sure to define each
What will be an ideal response?
The range of output for a duopoly ranges between the
A) perfectly competitive outcome and the monopolistically competitive outcome. B) efficient scale and the perfectly competitive outcome. C) minimum of ATC and the efficient scale. D) monopoly outcome and the perfectly competitive outcome. E) short-run perfectly competitive outcome and the long-run perfectly competitive outcome.
Assume a required reserve ratio of .25 and a discount rate of .05. If excess reserves rise by $20, demand deposits can expand by a maximum of
A) $20. B) $25. C) $80. D) $100.
If a firm finds that it can sell $13,000 worth of a product when its price is $5 per unit and $11,000 worth of it when its price is $6, then:
A. the demand for the product is elastic in the $6-$5 price range. B. the demand for the product must have increased. C. elasticity of demand is 0.74. D. the demand for the product is inelastic in the $6-$5 price range.