**Transcript for Educational Website**---### Comparative Advantage Scenario**Scenario Description:**If Texia specializes in food, it can produce 1,000 units of food and 0 units of clothing this year. If it specializes in clothing, it can produce 500 units of clothing and 0 units of food. This year, Urbania can produce either 500 units of food and 0 units of clothing or 200 units of clothing and 0 units of food. (Assume linear production possibility frontiers.)**Question:**_______ has the comparative advantage in the production of clothing and _______ has the comparative advantage in the production of food.**Multiple Choice Options:**- ○ Urbania; Texia- ○ Texia; Texia- ○ Urbania; Urbania- ○ Texia; Urbania**Explanation:**To determine which country has the comparative advantage, we need to compare the opportunity costs of producing goods in each country. The country with the lower opportunity cost in producing a good has the comparative advantage in that good.--- Note: There are no graphs or diagrams accompanying this scenario.

Correct: Texia, Urbania Texia specializes in clothing and Urbania specializes in food.

Answered: If Texia specializes in food, it can…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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34. To obtain good A in which one does not have a comparative advantage, it is better to acquire it by "indirect production" – producing good B, in which one does have a comparative advantage, and trading it for good A. True False False
Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day. France Germany Wine (Bottles) Cheese (Pounds) 16 Wine (Bottles) Cheese (Pounds) 12 8. 4. 25 20 15 2 3 3 4 10 4 Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese? O A. France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese. O B. France has a comparative advantage producing wine and cheese. OC. Germany has a comparative advantage producing wine and cheese. -OD. Neither has a comparative advantage producing wine or cheese. OE. France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine. Suppose that France is currently producing 1 bottle of wine and 12 pounds of cheese and Germany is currently producing 3 bottles of wine and 10 pounds of cheese. Then, assume instead that France and…
Sam can brew 5 gallons of root beer in an hour or he can make 4 pizzas in an hour. Ben can brew 7 gallons of root beer in an hour or he can make 5 pizzas in an hour. Who has an absolute advantage in making pizza? [ Select ] ["Ben", "Sam"] Who has a comparative advantage in making pizza? [ Select ] ["Sam", "Ben"]
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120 108 Hubert's PPF 96 84 72 Kate's PPF 60 48 36 12 60 120 180 240 300 360 420 480 540 600 CORN (Bushels) has an absolute advantage in the production of corn, and has an absolute advantage in the production of rye. Hubert's opportunity cost of producing 1 bushel of rye is bushels of corn, whereas Kate's opportunity cost of producing 1 bushel of rye is opportunity cost of producing rye than Kate, has a comparative bushels of corn. Because Hubert has a advantage in the production of rye, and has a comparative advantage in the production of corn. RYE (Bushels) 24
Table 3-5 England Spain Labour hours needed to make one unit: Cheese 1 Select one: O a. consumers who like bread O b. owners of cheese-producing companies Bread 2 8 O c. consumers who like cheese O d. owners of milk-producing companies Amount produced in 40 hours: Cheese Refer to Table 3-5. If England and Spain specialize and trade according to their respective comparative advantage, who gains in the short run in England? 40 20 Bread 20 5
The following diagram is for Country A based on the Ricardo model. Wheat (millions) 30 Terms of Trade E 15 PPF Corn 25 30 50 (millions) Refer to the figure above. Imports of this country equal_ O 25 million corns O 50 million corns O 15 million wheat O 30 million wheat
Figure 2-10 Honey (gallons) 480 0 Tahiti 400 Milk (gallons) Honey (gallons) 540 O 1.125 gallons of honey 0 O 1.5 gallons of honey O 0.8 gallons of honey O 2/3 of a gallon of honey Bora Bora 360 Figure 2-10 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. Milk (gallons) Refer to Figure 2-10. What is the opportunity cost of producing one gallon of milk in Bora Bora?
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(Use Table 1) Harold has a comparative advantage in and Wilhelmina has a comparative advantage in Table 1 * Harold Wilhelmina Coconuts Fish Coconuts Fish Output per day 2 1 1 1) fish, fish 2) coconuts, fish 3) coconuts, coconuts 6,
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