Comparative and Absolute Advantage

The U.S. can produce 50 cars and 25 tools.  Peru can produce 20 cars and 15 tools.  What is the opportunity cost of producing a car in the U.S.?

• .5 tools
• .5 cars
• .75 cars
• 1.3 tools

From the last question, who has the absolute advantage in tools?

• Peru
• U.S.
• neither
• not enough info

From the 1st question, who has the absolute advantage in the production of cars?

• U.S.
• Peru
• neither
• not enough info

Who has the comparative advantage in cars?

• Peru
• neither
• U.S.
• not enough info

What is the opportunity cost of making 1 car in Peru?

• .5 cars
• .75 tools
• 1.3 tools
• 2 tools

What should the U.S. import?

• cars
• tools
• both
• not enough info

What should Peru export?

• cars
• tools
• love
• rainbows

What is the opportunity cost of producing a tool in the U.S.?

• .5 cars
• .75 tools
• 2 cars
• 1.3 cars

The U.S. can produce 10 ipads or 20 phones.  China can produce 20 ipads or 30 phones. Who should produce what?

• U.S.-ipads
  China- phones
• U.S. phones
  China- ipads
• both should produce ipads
• they should not specialize

What is the opportunity cost of producing 1 ipad in the U.S.?

• 2 phones
• 1.5 phones
• .5 phones
• .33 phones