If there are two goods and two countries, then one country can have
A) an absolute advantage in only one good.
B) an absolute advantage in both goods.
C) a higher opportunity cost of producing both goods.
D) a lower opportunity cost of producing both goods.
B
You might also like to view...
The health care market in the United States is characterized by
A) considerable government involvement. B) third-party payment of health care costs. C) asymmetric information between providers and consumers. D) all of the above
Fab Tools Inc can produce 150 widgets and 100 axes in a month. Another company AllMyTools Inc can produce 80 widgets and 50 axes per month. Which of the following statements is true?
a. Fab Tools has an absolute advantage in production of both goods. b. AllMyTools has an absolute advantage in production of both goods. c. AllMyTools has a comparative advantage in production of axes. d. Fab Tools has a comparative advantage in production of widgets only.
The U.S. patent system
a. makes general knowledge excludable. b. makes specific, technical knowledge excludable. c. creates a disincentive to invent. d. Both a and b are correct.
Macroland produces dishes and glassware. Before trade, a set of dishes sells for $100 and a set of glasses sells for $50. When Macroland opens to trade, foreign demand for domestically produced china is strong, raising the price of a set of dishes to $125. But foreign competition reduces the demand for domestically produced glasses, so they now sell for $25 a set. Assuming workers cannot move between industries, the wages of workers producing dishes will ________ and the wages of workers producing glasses will ________.
A. decrease; increase B. increase; increase C. increase; decrease D. increase; not change