Comparative Advantage Homework

If Mexico allocates 12 labor units to computer production and 12 labor units to shirt production, how many computers and shirts can it produce?

• 1 computer, 6 shirts

• 12 computers, 2 shirts

• 6 computers, 1 shirt

• 2 computers, 12 shirts

What is the total world production of computers and shirts after both countries specialize according to their comparative advantage?

• 13 computers, 18 shirts

• 14 computers, 22 shirts

• 0 computers, 12 shirts

• 14 computers, 10 shirts

After specialization and trade, if the United States trades 1 computer to Mexico for 3 shirts, how many computers and shirts does Mexico consume?

• 0 computers, 12 shirts

• 1 computer, 6 shirts

• 1 computer, 9 shirts

• 13 computers, 13 shirts

What is the primary benefit of countries engaging in trade based on comparative advantage?

• It allows countries to become self-sufficient and avoid reliance on others.

• It leads to a decrease in overall world production of goods.

• It enables both trading countries to consume more goods than they could produce on their own.

• It ensures that all countries become equally wealthy.