**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…
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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
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Microsoft Word - (2)p macro HW 1 B AaBbCc AaBbCAaBbCcDc AaBbCcDc 2 ulgi 1 ülaue blout Production Year 1 Good X 50 Good Y 100 Prices ear! $1.20 S0.60 Year 2 Year 3 Year 1 $1.00 S0.60 Year3 S1.20 50 60 140 120 1-Assume that this economy produces onlytwo goods Good Xand Good Y. The value for this economy's nominal GDP in year lis 2- Assume that this economy produces only two goods Good l'and Good Y The value for this economy'snominal GDP in year 3 is 3-Assume that this economy produces only two goods Good l'and Good Y The value for this economy s nominal GDP in yea 4-Assume that this econonmy produces onlyt 1 is the base year. the value for this economy sre land Good Y If year 5-Assume that this economy produces only two goods Good land Good Y If year 1 is the base vear. the value for this economy's GDP deflator in vear 1 is 6- Assume that this economy produces only two goods Good.I and Good Y If year 1 is the base year. the value for this economy's GDP deflator in year 2 is 7- Assume…

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