The basis of comparative advantage is
having a higher production cost.
having a lower production cost.
having a lower opportunity cost.
having a higher opportunity cost.
4 points
Table
Assume that Bhutan and Nepal can switch between producing water bottles and producing glass containers at a constant rate.
Machine MinutesNeeded to Make 1
Water Bottles
Glass Containers
3
10
5
6
Refer to Table.Nepal has an absolute advantage in the production of
glass containers and a comparative advantage in the production of glass containers.
glass containers and a comparative advantage in the production of water bottles.
water bottles and a comparative advantage in the production of glass containers.
water bottleand a comparative advantage in the production of water bottle.
Figure
Refer to Figure.Assume Brandon and Monica both spend all their time to produce the good in which they have a comparative advantage. Further, they decide to trade with each other at the rate of 1 book equals 7 artcile. Based on these conditions, which statement seems to be accurate?
Monica will gain from this trade, but Brandon will not.
Brandon will gain from this trade, but Monica will not.
Brandon and Monica will both gain from this trade.
neither Brandon nor Monica will gain from this trade.
Refer to Figure.Malaysia's opportunity cost of one pound of soybeans is
3/4 pound of coffee and Indonesia’s opportunity cost of one pound of soybeans is 1/2 pound of coffee.
4/3 pounds of coffee and Indonesia’s opportunity cost of one pound of soybeans is 1/2 pound of coffee.
4/3 pounds of coffee and Indonesia’s opportunity cost of one pound of soybeans is 2 pounds of coffee.
3/4 pound of coffee and Indonesia’s opportunity cost of one pound of soybeans is 2 pounds of coffee.
when they are able to produce on the PPF but are able to consume inside the PPF.
when they are able to consume on the PPF but are able to produce outside the PPF.
when they are able to produce on the PPF but are able to consume outside the PPF.
when they are able to produce and consume outside the PPF.
Ashish has a comparative advantage in the production of caps.
Irfan must have an absolute advantage in the production of caps.
Ashish must have an absolute advantage in the production of caps.
Irfan has a comparative advantage in the production of caps.
Which of the following statement is correct?
If there are two producers, one producer can only have an absolute advantage in one good and the other will have an absoluteadvantage in other good.
If there are two producers, one producer can only have a comparative advantage in one good and the other will have a comparative advantage in other good.
If there are two producers, one producer can have a comparative advantagein both good goods.
If there are two producers,one producer can always have an absoluteadvantage in both goods.
Refer to Figure.China has an absolute advantage in the production of
tiles and a comparative advantage in the production of taps.
neither goodsand a comparative advantage in the production of taps.
taps and a comparative advantage in the production of tiles.
taps and a comparative advantage in the production of taps.
that the rate of the trade-off between two products fluctuates.
that the rate of the trade-off between two products is constant.
that the rate of the trade-off between two products decreases.
that the rate of the trade-off between two products increases.
If a country has a comparative advantage in a product then they should
export that good.
import that good.
neither import nor export that good.
be a closed economy.
TableAssume that Travis and Jimmy can switch between producing iron and producing hair dryer at a constant rate.
Minutes Needed to Make 1
Iron
Hair Dryer
12
neither good and Jimmy should specialize in the production of both goods.
both goods and Jimmy should specialize in the production of neither good.
iron and Jimmy should specialize in the production of hairdryer.
hairdryer and Jimmy should specialize in the production of iron.
people buy more of such goods.
people buy more of an alternative option.
people buy the same quantity as they bought before.
people buy less of such goods.
When the price is above the equilibrium it causes
quantity supplied to exceed quantity demanded causing surplus.
quantity demanded to exceed quantity supplied causing surplus.
quantity demanded to exceed quantity supplied causing shortage.
quantity supplied to exceed quantity demanded causing shortage.
cannot influence the price at which he/she would purchase the product.
can negotiate the prices if they purchase a large quantity.
have only option (seller) from where they canbuy the product.
can influence the price at this he/she would purchase the product.
to increase and equilibrium quantity to decrease.
to decrease and equilibrium quantity to increase.
and equilibrium quantity to both decrease.
and equilibrium quantity to both increase.
Refer to Figure.The movement from point A to point B on the graph shows
an increase in demand.
an increase in quantity demanded.
a decrease in quantity demanded.
a decrease in demand.
Refer to Figure. In the above graph theequilibrium price and quantity are, respectively,
$20and300units.
$15and200units.
$25 and 400 units.
$30 and500units.
rises, the demand for the good falls.
falls, the demand for the good rises.
falls, the quantity demanded of the good rises.
rises, the quantity demanded of the good rises.
Price of pizzawould rise, and the effect on quantity would be ambiguous.
Quantity of pizzawould fall, and the effect on price would be ambiguous.
Price of pizzawould fall, and the effect on quantity would be ambiguous.
Quantity of pizzawould rise, and the effect on price would be ambiguous.
when both theincome of the buyerand the price of the productare held constant.
when only the price of the productis held constant.
when everything is a variable factor.
when all nonprice determinants of demand are held constant.
Refer to Figure.Assume that the above market is for plastic water bottles.Which of the following situations would cause the supply curve for water bottles to shift from S' to S?
Anincreaseinthepriceofthose bottles.
Anincreaseinincome of the current and potential buyers of those bottles.
Anincreaseinthepriceofplastics used to make those bottles.
Adecreaseinthepriceof plastics used to make those bottles.
an economy.
a coalition.
a market.
a competition.
Refer to Figure. At a price of $35, there would be a
shortage of400units.
shortageof200units.
surplus of 400 units.
surplusof200units.
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