Macro 1.3-1.4 Absolute and Comparative Advantage/Demand

Front

What does absolute advantage refer to?

Back

A situation where a country can produce a good with fewer resources than another country.

Front

If Country A can produce 100 cars with 10 workers and Country B can produce 80 cars with the same number of workers, which country has an absolute advantage?

Back

Country A

Front

What is opportunity cost?

Back

The value of the next best alternative foregone when a choice is made.

Front

Why does most trade occur according to economics?

Back

Because of comparative advantage

Front

What can a country do if it has a comparative advantage in producing a certain good?

Back

Export this good

Front

If Country A has a comparative advantage in cars and Country B in computers, what should Country A specialize in?

Back

Cars

Front

Use the graph to determine which country has an absolute advantage in producing each good: Wheat and Textiles

Back

Wheat Country A and Textiles Country B

Front

For Country A the opportunity cost of a bushel of wheat is:

Back

1/2 Unit of Textiles

Front

Which of the following changes will most likely result in an increase in the demand for hamburgers in a town: The price of hot dogs decreases, The price of drinks sold at restaurants increases, Income in the town decreases, The number of vegetarians in the town decreases?

Back

The number of vegetarians in the town decreases.

Front

Which of the following will result in a decrease in the quantity of lemons demanded? Options: an increase in the price of limes, an increase in the price of lemonade, an increase in the price of lemons, a decrease in income.

Back

an increase in the price of lemons