Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 2, Problem 13E
To determine
The option with regards to
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Someone has a comparative advantage in producing a good if they can produce that good
in greater quantities
at a lower opportunity cost
using more capital and less labor
using more labor and less capital
When a country has a comparative advantage in producing a certain good,
A: the country should import that good.
B: the country should produce just enough of that good for its own consumption.
C:the country’s opportunity cost of that good is high relative to other countries’ opportunity costs of that same good.
D: then specializing in the production of that good and trading for other goods could allow that country to consume at a point beyond its production possibilities frontier
Q) When a country has a comparative advantage in producing a certain good,
A: the country should import that good.
B: the country should produce just enough of that good for its own consumption.
C:the country’s opportunity cost of that good is high relative to other countries’ opportunity costs of that same good.
D: then specializing in the production of that good and trading for other goods could allow that country to consume at a point beyond its production possibilities frontier
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- A country has an absolute advantage in the production of a good if it can _____ of the good than another country.arrow_forwardWhich country has absolute advantage in the production of food. Explain. See attached.arrow_forwardFood (Comparative Advantage) The consumption possibilities frontiers shown by the blue lines in the following exhibit assume terms of trade of 1 unit of clothing for 1 unit of food. What would the consumption possibilities frontiers look like if the terms of trade were 1 unit of clothing for 2 units of food? Production (and Consumption) Possibility Frontiers with Trade (Millions of Units Per Day) (a) United States (b) Izodia 600 500- 400 600 500 U 400 300 200 U 100 Food 300 200 100 13 0 100 200 300 400 Clothing 0 100 200 300 400 Clothingarrow_forward
- a) Determine which country has a comparative advantage in each good . b) If Country A and Country B each have 100 units of labour , calculate the maximum production of each good for both countries .arrow_forwardWhich country has a comparative advantage in the production of wine?arrow_forwardWhich country has comparative advantage in the production of food? Explain. See attached.arrow_forward
- Suppose a country is currently producing at a point on its production possibility frontier, and undertakes no trade with other countries. Then trade is opened up. Which of the following would not occur as a direct result?a) Its production possibility frontier would shift.b) Its production would shift to another point on its production possibility frontier.c) The pattern of products that the country produced would differ from the pattern that its consumers consumed.d) Consumers would be able to consume at a point outside the production possibility frontier. Please dont use any ai tool.arrow_forwardAccording to the "Principle of Comparative Advantage," a country should specialize in producing a good or service if it has:a) The highest opportunity cost b) The lowest opportunity cost c) The highest production cost d) The lowest production costarrow_forwardA producer has a comparative advantage in a good if it is the most efficient producer of this good. True Falsearrow_forward
- Discuss the opportunity cost you incur for some activity in your life. Additionally, what activity do you feel you have comparative advantage in?arrow_forwardPRODUCT PER WORKER SOUTH AFRICA NIGERIA TABLES 100 UNITS 40 UNITS CHAIRS 50 UNITS 10 UNITS Calculate the opportunity costs of producing tables in South Africaand in Nigeria. Show your calculations. Which country has an absolute advantage in the production of tables?Justify your answer. Explain which product each of the countries should specialise in andexport. Use the information relating to comparative advantage tosupport your answer.arrow_forwardhome cheese alc=1hr/kg wine alw=2hrs/gallon foreign cheese alc*=6hrs/kg wine alw*=3hrs/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign* ) country has an absolute advantage? Show in which product does the Home (Foreign* ) country has comparative advantage? Calculate the relative supply (RS) With trade, what is the equilibrium range that the relative price of cheese to wine will settle? Supposing that the intersection of RS and RD occurs at PC /PW = 1, what is the implication?arrow_forward
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