Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 1R, Problem 13MCQ
To determine
The question requires us to determine the name of tribes which have
Expert Solution & Answer
Explanation of Solution
After the discovery of new technology in Frivoli, the new table will be:
| Tribe | Spaghetti in pounds | Meatballs in pounds |
| Tivoli | 30 | 50 |
| Frivoli | 40 | 60 |
From the above table, Frivoli is producing more meatballs in absolute terms. So, Frivoli will have an absolute advantage in producing meatballs.
To determine the comparative advantage, we need to calculate the
In Tivoli, the opportunity cost of producing meatballs = 30/50 = 0.6 units of spaghetti.
In Frivoli, the new opportunity cost of producing meatballs = 40/60 = 0.66 pounds of spaghetti.
The opportunity cost of producing meatballs is still lower in Tivoli. So, Tivoli will have a comparative advantage in producing meatballs while Frivoli will have an absolute advantage in producing meatballs.
Thus, the option “d” is correct.
Economics Concept Introduction
- The country with a lower opportunity cost of producing a product will have a comparative advantage in producing that product.
- The country with high production of a product in absolute terms will have an absolute advantage in producing that product.
Chapter 1R Solutions
Krugman's Economics For The Ap® Course
Ch. 1R - Prob. 1MCQCh. 1R - Prob. 2MCQCh. 1R - Prob. 3MCQCh. 1R - Prob. 4MCQCh. 1R - Prob. 5MCQCh. 1R - Prob. 6MCQCh. 1R - Prob. 7MCQCh. 1R - Prob. 8MCQCh. 1R - Prob. 9MCQCh. 1R - Prob. 10MCQ
Ch. 1R - Prob. 11MCQCh. 1R - Prob. 12MCQCh. 1R - Prob. 13MCQCh. 1R - Prob. 14MCQCh. 1R - Prob. 15MCQCh. 1R - Prob. 16MCQCh. 1R - Prob. 17MCQCh. 1R - Prob. 18MCQCh. 1R - Prob. 19MCQCh. 1R - Prob. 20MCQCh. 1R - Prob. 21MCQCh. 1R - Prob. 22MCQCh. 1R - Prob. 23MCQCh. 1R - Prob. 24MCQCh. 1R - Prob. 25MCQCh. 1R - Prob. 1FRQCh. 1R - Prob. 2FRQCh. 1R - Prob. 3FRQ
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