Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concepts of advantage and trade, we can say that the opportunity cost of one pair of gloves is:
A. lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production.
B. the same for both the United States and Bangladesh, therefore they both have the comparative advantage in glove production.
C. the same for both the United States and Bangladesh, therefore no comparative advantage exists.
D. higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.
Answer: D
You might also like to view...
Most economists agree that ________ are the single most important source of economic growth.
A. increases in physical capital B. technological advances C. increases in human capital D. discoveries of natural resources
If a tax is imposed in a market in which demand is perfectly inelastic
A) the buyers pay the entire tax. B) the sellers pay the entire tax. C) the buyers and the sellers both pay a portion of the tax. D) neither the buyer nor the seller pays the tax.
Figure36-8
?
Which of the graphs in Figure 36-8 illustrates the AD–AS shifts associated with a currency depreciation?
A. 1 B. 2 C. 3 D. 4
When the value of money is on the vertical axis, an increase in the price level shifts money demand to the right
a. True b. False Indicate whether the statement is true or false