**Labor Hours Needed and Production Capabilities**The table provides information on labor hours needed and production capabilities for England and Spain in producing cheese and bread.**Labor Hours Needed to Make One Unit:**- **England:** - Cheese: 1 hour - Bread: 2 hours- **Spain:** - Cheese: 2 hours - Bread: 8 hours**Amount Produced in 40 Hours:**- **England:** - Cheese: 40 units - Bread: 20 units- **Spain:** - Cheese: 20 units - Bread: 5 units**Question:**Refer to Table 3-6. If England and Spain trade based on the principle of comparative advantage, which country will export or import each product?**Select one:**- a. England will import cheese, and Spain will import bread.- b. England will import bread, and Spain will import cheese.- c. England will import cheese, and Spain will import cheese.- d. England will import bread, and Spain will import bread.(Note: All options marked as "cross out" suggest instructional feedback or analysis.) **Economic Decision-Making in Dictatorland**In the nation of Dictatorland, farmers traditionally feed grain to their livestock. However, central planners have decided to increase the price of grain to satisfy grain farmers and also to reduce the price of bread made from that grain, aiming to please city dwellers. As a result, the current price of bread has become lower than the price of grain.**What might we now expect?****Select one:**- **a.** City dwellers to start buying grain to make bread to sell- **b.** Farmers to continue to feed grain to their livestock- **c.** City dwellers to start buying grain to make bread to eat- **d.** Farmers to start feeding bread to their livestockEach option has been marked with "cross out," indicating that none of these options are expected actions or outcomes.

Comparative advantage: It refers to the ability that a firm or a country have to produce more of a…

Labour hours needed to make one unit: Amount produced in 40 hours: Cheese 40 20 Cheese Bread Bread 20 England Spain 1 8 fer to Table 3-6. If England and Spain trade based on the principle of comparative advantage, which country will export or import each pro- ect one: a. England will import cheese, and Spain will import bread. b. England will import bread, and Spain will import cheese. c. England will import cheese, and Spain will import cheese. d. England will import bread, and Spain will import bread.

Labour hours needed to make one unit: Amount produced in 40 hours: Cheese 40 20 Cheese Bread Bread 20 England Spain 1 8 fer to Table 3-6. If England and Spain trade based on the principle of comparative advantage, which country will export or import each pro- ect one: a. England will import cheese, and Spain will import bread. b. England will import bread, and Spain will import cheese. c. England will import cheese, and Spain will import cheese. d. England will import bread, and Spain will import bread.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

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

Question

**Labor Hours Needed and Production Capabilities**

The table provides information on labor hours needed and production capabilities for England and Spain in producing cheese and bread.

**Labor Hours Needed to Make One Unit:**
- **England:**
- Cheese: 1 hour
- Bread: 2 hours
- **Spain:**
- Cheese: 2 hours
- Bread: 8 hours

**Amount Produced in 40 Hours:**
- **England:**
- Cheese: 40 units
- Bread: 20 units
- **Spain:**
- Cheese: 20 units
- Bread: 5 units

**Question:**
Refer to Table 3-6. If England and Spain trade based on the principle of comparative advantage, which country will export or import each product?

**Select one:**
- a. England will import cheese, and Spain will import bread.
- b. England will import bread, and Spain will import cheese.
- c. England will import cheese, and Spain will import cheese.
- d. England will import bread, and Spain will import bread.

(Note: All options marked as "cross out" suggest instructional feedback or analysis.)

**Economic Decision-Making in Dictatorland**

In the nation of Dictatorland, farmers traditionally feed grain to their livestock. However, central planners have decided to increase the price of grain to satisfy grain farmers and also to reduce the price of bread made from that grain, aiming to please city dwellers. As a result, the current price of bread has become lower than the price of grain.

**What might we now expect?**

**Select one:**

- **a.** City dwellers to start buying grain to make bread to sell
- **b.** Farmers to continue to feed grain to their livestock
- **c.** City dwellers to start buying grain to make bread to eat
- **d.** Farmers to start feeding bread to their livestock

Each option has been marked with "cross out," indicating that none of these options are expected actions or outcomes.

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