Suppose an American worker can make 100 chairs or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 chairs or catch 400 fish per day. Which of the following statements is true?
A. Chile has the comparative advantage in chair production.
B. Both the United States and Chile have a comparative advantage in chair production.
C. Neither the United States nor Chile has a comparative advantage in chair production.
D. The United States has the comparative advantage in chair production.
Answer: C
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If supply and demand analysis is a measure of how, then elasticity is a measure of:
A. how much. B. when. C. why. D. how quickly.
When the Fed injected newly made money into the economy by buying bonds, it:
A. was practicing quantitative easing. B. was trying to avoid a deflationary period similar to Japan. C. inserted over $1 trillion of new money into the economy. D. All of these statements are true.
Central banks can increase the money supply by:
a. Buying government securities. b. Selling foreign exchange. c. Raising margin requirements. d. All of the above. e. None of the above.
All of the following are considered a barrier to entry into a market EXCEPT
A. government licenses. B. governmental regulations of business conduct relating to workplace conditions. C. lowering tariffs. D. persistent declining long-run average costs as output increases.