e) Which of the following statements is true about the table above? A) Home has a lower labor productivity in both Cloth and Wheat B) Foreign has a lower labor productivity in both Cloth and Wheat C) Home has a higher labor productivity in cloth but Foreign has a higher labor productivity in Wheat D) Home has a lower labor productivity in cloth but Foreign has a higher labor productivity in Wheat f) Which of the following statements is true about the table above? A) Home has a comparative advantage in both Cloth and Wheat. B) Foreign has a comparative advantage in both Cloth and Wheat. C) Home has a comparative advantage in Cloth and Foreign in Wheat D) Foreign has a comparative advantage in Cloth and Home in Wheat. Suppose the unit labor requirements in Home and Foreign for the two goods Cloth and Wheat are as follows. Home Foreign Unit Labor Requirements Cloth 30 60 Wheat 20 30 Answer the following multiple choice questions based on the table above. a) Given the information in the table above, Home has an absolute advantage in A) Cloth B) Wheat. C) Both Cloth and Wheat D) Neither b) Given the information in the table above, the opportunity cost of Cloth in Home is A) 1 Wheat B) 2 Wheat C) 1.5 Wheat D) 4 Wheat c) Given the information in the table above, the opportunity cost of Wheat in Foreign is A) 1 Cloth B) 2 Cloths C) ½ Cloth D) 4 Cloths d) Given the information in the table above, the relative price of Cloth (Price of Cloth/Price of Wheat) in Home in autarky is going to be A) 1 B) 2 C) 1.5 D) 4
e) Which of the following statements is true about the table above? A) Home has a lower labor productivity in both Cloth and Wheat B) Foreign has a lower labor productivity in both Cloth and Wheat C) Home has a higher labor productivity in cloth but Foreign has a higher labor productivity in Wheat D) Home has a lower labor productivity in cloth but Foreign has a higher labor productivity in Wheat f) Which of the following statements is true about the table above? A) Home has a comparative advantage in both Cloth and Wheat. B) Foreign has a comparative advantage in both Cloth and Wheat. C) Home has a comparative advantage in Cloth and Foreign in Wheat D) Foreign has a comparative advantage in Cloth and Home in Wheat. Suppose the unit labor requirements in Home and Foreign for the two goods Cloth and Wheat are as follows. Home Foreign Unit Labor Requirements Cloth 30 60 Wheat 20 30 Answer the following multiple choice questions based on the table above. a) Given the information in the table above, Home has an absolute advantage in A) Cloth B) Wheat. C) Both Cloth and Wheat D) Neither b) Given the information in the table above, the opportunity cost of Cloth in Home is A) 1 Wheat B) 2 Wheat C) 1.5 Wheat D) 4 Wheat c) Given the information in the table above, the opportunity cost of Wheat in Foreign is A) 1 Cloth B) 2 Cloths C) ½ Cloth D) 4 Cloths d) Given the information in the table above, the relative price of Cloth (Price of Cloth/Price of Wheat) in Home in autarky is going to be A) 1 B) 2 C) 1.5 D) 4
Chapter13: General Equilibrium And Welfare
Section: Chapter Questions
Problem 13.2P
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Transcribed Image Text:e) Which of the following statements is true about the table above?
A) Home has a lower labor productivity in both Cloth and Wheat
B) Foreign has a lower labor productivity in both Cloth and Wheat
C) Home has a higher labor productivity in cloth but Foreign has a higher labor productivity in
Wheat
D) Home has a lower labor productivity in cloth but Foreign has a higher labor productivity in
Wheat
f) Which of the following statements is true about the table above?
A) Home has a comparative advantage in both Cloth and Wheat.
B) Foreign has a comparative advantage in both Cloth and Wheat.
C) Home has a comparative advantage in Cloth and Foreign in Wheat
D) Foreign has a comparative advantage in Cloth and Home in Wheat.
Transcribed Image Text:Suppose the unit labor requirements in Home and Foreign for the two goods Cloth and Wheat are
as follows.
Home
Foreign
Unit Labor Requirements
Cloth
30
60
Wheat
20
30
Answer the following multiple choice questions based on the table above.
a) Given the information in the table above, Home has an absolute advantage in
A) Cloth
B) Wheat.
C) Both Cloth and Wheat
D) Neither
b) Given the information in the table above, the opportunity cost of Cloth in Home is
A) 1 Wheat
B) 2 Wheat
C) 1.5 Wheat
D) 4 Wheat
c) Given the information in the table above, the opportunity cost of Wheat in Foreign is
A) 1 Cloth
B) 2 Cloths
C) ½ Cloth
D) 4 Cloths
d) Given the information in the table above, the relative price of Cloth (Price of Cloth/Price of
Wheat) in Home in autarky is going to be
A) 1
B) 2
C) 1.5
D) 4
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