Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 9.1, Problem 10Q
To determine
The reason for a highly valuable resource leads to appreciation of currency and loss of
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If each country specializes in the good in which it has a comparative advantage,....will gain from that trade because
Country X
Country Y
Phones
Television sets
a) Fill in the table to show that country x has an absolute advantage in the production of
both goods and a comparative advantage in the production of phones.
Which of the following BEST describes comparative advantage?
Country A can produce a product at a lower opportunity cost than Country B
Country A can produce more of a product than Country B
Country A has a currency worth more than the currency of country B
Country A uses a smaller amount of a resource to produce than Country B
Chapter 9 Solutions
Microeconomics
Ch. 9.1 - Prob. 1QCh. 9.1 - Prob. 2QCh. 9.1 - Prob. 3QCh. 9.1 - Prob. 4QCh. 9.1 - Prob. 5QCh. 9.1 - Prob. 6QCh. 9.1 - Prob. 7QCh. 9.1 - Prob. 8QCh. 9.1 - Prob. 9QCh. 9.1 - Prob. 10Q
Ch. 9 - Prob. 1QECh. 9 - Prob. 2QECh. 9 - Prob. 3QECh. 9 - Prob. 4QECh. 9 - Prob. 5QECh. 9 - Prob. 6QECh. 9 - Prob. 7QECh. 9 - Prob. 8QECh. 9 - Prob. 9QECh. 9 - Prob. 10QECh. 9 - Prob. 11QECh. 9 - Prob. 12QECh. 9 - Prob. 13QECh. 9 - Prob. 14QECh. 9 - Prob. 15QECh. 9 - Prob. 16QECh. 9 - Prob. 17QECh. 9 - Prob. 18QECh. 9 - Prob. 19QECh. 9 - Prob. 1QAPCh. 9 - Prob. 2QAPCh. 9 - Prob. 3QAPCh. 9 - Prob. 4QAPCh. 9 - Prob. 5QAPCh. 9 - Prob. 1IPCh. 9 - Prob. 2IPCh. 9 - Prob. 3IPCh. 9 - Prob. 4IPCh. 9 - Prob. 5IP
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- Is it possible to not have a comparative advantage at anything? Why or why not?arrow_forwardAmerican worker takes 20 hours to produce one computer and 300 hours to produce an RV. A Japanese worker takes 30 hours to produce one computer and 450 Hours to produce an RV. Which country has a comparative advantage in what product? Why?arrow_forwardWhy do economists oppose policies that restrict trade among nations and how the concepts of comparative advantage, specialization and trade apply to individuals and households?arrow_forward
- If a country produces only two goods, then it is not possible to have a comparative advantage in the production of both those goods. True Falsearrow_forwardBetween two, the producer that requires a smaller quantity of inputs to produce a good Has an absolute advantage in the production of that good Must produce and not trade at all Has a comparative advantage in the production of that good Should not produce that good Should import that goodarrow_forwardWhich country has comparative at producing good x. How can you tell. Which country has a comparative advantage at producing yarrow_forward
- Happyland can produce 40 tones of marshmallows or 20 tones of chocolate in a year. Friendshipland can produce 80 tones of marshmallows or 40 tones of chocolate in a year. Can these countries benefit from trade with each other based on specialization and comparative advantage? Yes Noarrow_forwardThe table below shows the maximum quantities of two goods that each country can produce. If the countries follow the principle of comparative advantage, which of the following is a potential benefit of trade? Vibranium (tons) Gold (tons) Wakanda 8 tons 2 tons Zamunda 2 tons 1 ton Group of answer choices Trade can allow each country to increase consumption beyond its production possibilities frontier. Trade can allow each country to shift its production possibilities frontier outward to higher levels of production. Trade can allow each country to become less vulnerable to the actions of the other country. All of these answers are correct.arrow_forwardThere are two countries in the world, A and B, which trade only two goods, shirts and pants. Under autarky, shirts are cheaper in Country A than in Country B, whereas the pants are more expensive in Country A. Suppose that the world price of shirts lies above the two countries' autarky prices. BothCountry A and Country B will only produce shirts when the opportunity to trade exists.Answer true, false, or uncertain. Please briefly explain your answerarrow_forward
- Explain briefly why a country can have an absolute advantage in the production of two goods, and yet a comparative advantage in the production of only one good just in a few sentencesarrow_forwardCountry X can produce 1,000 units of food and 2,000 units of clothes. Country Y can produce 1,000 units of food and 1,000 units of clothes. In order to maximize trade according to the principles of comparative advantage, country X should produce food and import clothes from country Y. country Y should produce food and import clothes from country X. country X and Y should produce both food and clothes to meet their own needs. country Y should produce both food and clothes, and import additional clothes from country X.arrow_forwardEvaluate the following statement: "Canada has an absolute advantage in growing wheat. Therefore, it must have a comparative advantage in growing wheat.arrow_forward
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