Suppose that Slovenia and Slovakia both produce sunflowers and liquor. Slovenia's opportunity sunflowers while Slovakia's opportunity cost of producing a case of liquor is 11 bushels of sunflowers. By comparing the opportunity cost of producing liquor in the two countries, you can tell that production of liquor and has a comparative advantage in the production of sunflowers. has a comparative advantage in the Suppose that Slovenia and Slovakia consider trading liquor and sunflowers with each other. Slovenia can gain from specialization and trade as long as it receives more than of sunflowers for each case of liquor it exports to Slovakia. Similarly, Slovakia can gain from trade as long as of liquor for each bushel of sunflowers it exports to Slovenia. it receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of liquor in terms of sunflowers) would allow both

Suppose that Slovenia and Slovakia both produce sunflowers and liquor. Slovenia's opportunity sunflowers while Slovakia's opportunity cost of producing a case of liquor is 11 bushels of sunflowers. By comparing the opportunity cost of producing liquor in the two countries, you can tell that production of liquor and has a comparative advantage in the production of sunflowers. has a comparative advantage in the Suppose that Slovenia and Slovakia consider trading liquor and sunflowers with each other. Slovenia can gain from specialization and trade as long as it receives more than of sunflowers for each case of liquor it exports to Slovakia. Similarly, Slovakia can gain from trade as long as of liquor for each bushel of sunflowers it exports to Slovenia. it receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of liquor in terms of sunflowers) would allow both

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that the US can produce corn at a lower opportunity cost than South Korea and South Korea can produce cars at a lower opportunity cost than the US. Which of the following is not true? a. south korea should specialize production in cars b. both countries have a comparative advantage c. the us should specialize production in corn d. the us has an absolute advantage in production of corn and cars
If France is said to have an absolute advantage over Mexico in the production of wheat, this means that, given the same resources, Mexico must have an absolute advantage in producing some good other than wheat. a. France can produce more wheat than Mexico. b. France has an absolute advantage in all goods that are complements to wheat. c. France must have an absolute advantage over Mexico in producing all goods. d. Mexico must have a comparative advantage over France in the production of wheat.
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