US and Canada can both grow wheat and can do mining. Use the following table to look for which country has a comparative advantage in mining. (HINT: Find the cost of mining in terms of wheat in each country.) Absolute Cost in US Absolute Cost in Canada Wheat $5 C$8 Mining $10 C$12
a. Canada has a comparative advantage in mining.
b. The US has a comparative advantage in mining.
c. No comparative advantage in mining exists for either nation.
d. We must first know the exchange rate to be able to answer this question.
e. Both a and b.
a
You might also like to view...
Which of the following always lowers the equilibrium price?
A) an increase in both demand and supply B) a decrease in both demand and supply C) an increase in demand combined with a decrease in supply D) a decrease in demand combined with an increase in supply
In the above figure, assume the economy starts out in equilibrium at point d. If the Fed increases the money supply so that the new aggregate demand curve is AD3, then the long-run equilibrium will be at point
A) a. B) b. C) c. D) i.
The optimal level of pollution is
a. zero b. the level at which the marginal social cost of air quality equals the marginal social benefit c. the level at which the average social cost of air quality equals the average social benefit d. the level at which the total social cost of air quality equals the total social benefit e. the level at which the marginal social cost of air quality is minimized
A nation has a positive net capital outflow. Which of the following is correct?
a. Purchases of foreign assets by domestic residents exceed purchases of domestic assets by foreigners b. It has positive net exports. c. Its savings exceeds its domestic investment. d. All of the above are correct.