England 12 3 50. England has a comparative advantage in the production of a. neither good and Spain has a comparative advantage in the production of both goods. b. cheese and Spain has a comparative advantage in the production of bread. c. bread and Spain has a comparative advantage in the production of cheese. d. both goods and Spain has a comparative advantage in the production of neither good. 51. At which of the following prices would both England and Spain be willing to trade with each other? a. England and Spain could not both gain from trade with each other at any price. b. 8 units of bread for 8 units of cheese C. 8 units of bread for 12 units of cheese d. 8 units of bread for 24 units of cheese

England 12 3 50. England has a comparative advantage in the production of a. neither good and Spain has a comparative advantage in the production of both goods. b. cheese and Spain has a comparative advantage in the production of bread. c. bread and Spain has a comparative advantage in the production of cheese. d. both goods and Spain has a comparative advantage in the production of neither good. 51. At which of the following prices would both England and Spain be willing to trade with each other? a. England and Spain could not both gain from trade with each other at any price. b. 8 units of bread for 8 units of cheese C. 8 units of bread for 12 units of cheese d. 8 units of bread for 24 units of cheese

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

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practice final 1
For questions 50 and 51 the table below showing the input costs of making bread and cheese might be helpful. Assume that that
costs are constant and that England and Spain each have 40 hours available to make food.
Labor Hours Needed to Make 1 Unit of
Bread
Cheese
Spain
England
1
12
50. England has a comparative advantage in the production of
a. neither good and Spain has a comparative advantage in the production of both goods.
b. cheese and Spain has a comparative advantage in the production of bread.
c. bread and Spain has a comparative advantage in the production of cheese.
d. both goods and Spain has a comparative advantage in the production of neither good.
51. At which of the following prices would both England and Spain be willing to trade with each other?
a. England and Spain could not both gain from trade with each other at any price.
b. 8 units of bread for 8 units of cheese
C. 8 units of bread for 12 units of cheese
d. 8 units of bread for 24 units of cheese

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