Input Output Comparative Advantage Mix-Up Practice

Which of the following is true about this problem?

• Pluto has an absolute and comparative advantage in the production of rocks

• Pluto has an absolute advantage in Rocks and a comparative advantage in dust particles

• Mercury has an absolute advantage in the production of dust particles and a comparative advantage in rocks

• Mercury and Pluto should not trade with each other

Answer explanation

The opportunity cost of Lancetown to make 1 unit of cat litter is _________ car whereas Benjamin Republic's opportunity cost to produce 1 cat litter is ________ cars

• 1/50; 1/5

• 50; 5

• 1/5; 1/50

• 5; 50

Answer explanation

Given the provided table which of the following statements is true

• France has an absolute advantage in both goods

• Switzerland has a comparative advantage in Cherries

• Switzerland has an absolute advantage the production of apples and cherries but only a comparative advantage in cherries

• France has a comparative advantage in cherries and Switzerland apples

Answer explanation

What is the per unit opportunity cost of Canada to make 1 chair?

• 1/8 Car

• 5 Cars

• 1/5 Car

• 8 Cars

Answer explanation

Based on the provided data what can be inferred?

• Disney is horrible at making fantasy movies and should avoid it at all costs

• Hallmark has the market on romance cornered and should specialize in it

• Disney and Hallmark both excel at fantasy movies. As such there is no reason for them trade.

• Disney's approach to releasing Mulan is brilliant

Answer explanation

Which of the following statements about Guam and the Czech republic is true

• Neither country has an absolute advantage in fish

• The Czech Republic has an absolute and comparative advantage in the production of beads

• Guam has an absolute and comparative advantage in the production of fish

• Guam has an absolute and comparative advantage in the production of both goods.

Answer explanation

For what good and country is the per unit opportunity cost 5 toys

• widgets; US

• widgets; Canada

• toys; US

• toys: Canada

Answer explanation

Which of the following statements is true

• Argentina has an absolute advantage in the production of both goods

• Argentina has an absolute and comparative advantage in the production of bananas

• Colombia has an absolute advantage in bananas

• Colombia has an absolute and comparative advantage in the production of bananas

Answer explanation

All of the following statements are true EXCEPT

• France has an absolute advantage in the production of coffee

• France has an absolute advantage in cream

• Kuwait has a comparative advantage in coffee

• France has a comparative advantage in cream

Answer explanation

Which of the following statements is true about the trade relationship between Sweden and Indonesia

• Indonesia should trade oil because they only give up 1/4 of an iPhone to make a barrel of oil and Sweeden must give up 4.

• Indonesia should trade oil because they only give up 1/4 an iPhone to make a barrel of oil and Sweden must give up 500 I-phones to do so

• Sweden should specialize in oil because they only give up 1/500 of an iPhone to make a barrel of oil and Indonesia must 4 iPhones to produce a barrel of oil

• Sweden should specialize in oil because they can produce 5000 barrels and that is a lot more than Sweden can produce

Answer explanation