1.3 Absolute and Comparative Advantage

Front

Based on the information provided above, which of the following must be true? Home Nation has an absolute advantage in the production of computers. Foreign Nation has an absolute advantage in the production of autos. Home Nation has a comparative advantage in the production of autos. Foreign Nation has a comparative advantage in the production of computers. Neither nation has a comparative advantage.

Back

Home Nation has an absolute advantage in the production of computers.

Front

Based on the information in the table above, which of the following is true? Options: Peru has a comparative advantage in producing wheat., Peru has an absolute advantage in producing wheat., Brazil has an absolute advantage in producing wheat., Peru has a comparative advantage in producing coffee., Brazil has a comparative advantage in producing coffee.

Back

Peru has a comparative advantage in producing coffee.

Front

The graph above shows the production possibilities curve for Factory X and Factory Y. If Factory X uses the same amount of resources to produce skateboards and bikes as Factory Y uses, which of the following is true?

Back

Factory X has a comparative advantage in producing skateboards.

Front

Based on the data in the table, which of the following is true? Country X has a comparative advantage in producing cars. Country Y has a comparative advantage in producing cars. Country X has an absolute advantage in producing cars. Country X has an absolute advantage in producing motorcycles. Country Y has a comparative advantage in producing motorcycles.

Back

Country Y has a comparative advantage in producing cars.

Front

Based on the production capabilities of Country A and Country B, which of the following is true? Country A can produce either 2 tons of cocoa or 4 cars with 10 units of labor. Country B can produce either 5 tons of cocoa or 25 cars with 10 units of labor.

Back

Country A has a comparative advantage in the production of cocoa, while Country B has a comparative advantage in the production of cars.

Front

The table provided shows the time required to produce one crane or one truck in the United States and Thailand. The United States and Thailand have the same amount of resources. Which of the following can be accurately concluded from the data?

Back

Thailand has a comparative advantage in producing cranes, and the United States has a comparative advantage in producing trucks.

Front

The table above shows the quantity of motorcycles and automobiles produced by two countries that use the same amount of resources. Which of the following is true?

Back

Country Y has an absolute and comparative advantage in the production of motorcycles.

Front

Given this information, which of the following statements is correct? Options: X has a comparative advantage in the production of both food and clothing., Y has a comparative advantage in the production of both food and clothing., X has a comparative advantage in food production, whereas Y has a comparative advantage in clothing production., Y has a comparative advantage in food production, whereas X has a comparative advantage in clothing production., Neither country has a comparative advantage in the production of either good.

Back

X has a comparative advantage in food production, whereas Y has a comparative advantage in clothing production.

Front

Sam and Bill run a leaf raking and lawn mowing business. In one day, Sam can rake 3 lawns or mow 5 lawns whereas Bill can rake 2 lawns or mow 6 lawns. Which of the following correctly describes Sam’s and Bill’s absolute and comparative advantages?

Back

Bill has a comparative advantage in mowing and an absolute advantage in mowing.