![]() ![]() You can trade some of your apples for some of your neighbor's cherries, and both of you will end up with more of both fruit. You have a comparative advantage in picking apples. If you can pick apples at a lower opportunity cost than your neighbor, which of the following statements is true? You and your neighbor pick apples and cherries. Has a comparative advantage producing cheese. Has a comparative advantage producing wine and Has an absolute advantage producing cheese. Has an absolute advantage producing wine and A Assume the table below shows the quantities of wine and cheese that a worker can produce in an hour in France and Italy. Is the ability of an individual, a firm, or a country to produce a good or service at a higher absolute cost than competitors. Is the ability of an individual, a firm, or a country to produce a good or service at a lower absolute cost than competitors. Is the ability of an individual, a firm, or a country to produce a good or service at a higher opportunity cost than competitors. Is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. Japan,Japan,the United States D Comparative advantage The United States,the United States,Japan (Enter your responses rounded to one decimal place.)įrom the tables above it is clear that _ has an absolute advantage in the production of both goods and that _ has a comparative advantage in cell phones, while _ has a comparative advantage in digital music players. cell phones and digital music players are exactly the same.ĭetermine the missing opportunity costs in the table below and fill in the missing values. Assume that each country uses only labor to produce each good, and that Japanese and U.S. A Suppose the United States and Japan produce only cell phones and digital music players, like Apple's iPod. ![]() None of the above. Buchanan's argument is correct. textile industry produces its goods at a lower opportunity cost than in China. His argument is incorrect because the United States textile industry is not more efficient. His argument is incorrect because China does not produce textiles. His argument is incorrect because the United States should free up resources to produce the goods in which it has the comparative advantage. 66.Īccording to comparative advantage, why is Buchanan's argument incorrect? Source: Patrick J. Buchanan, The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy, Boston: Little, Brown, 1998, p. why surrender the more efficient American industry? Why shift to a reliance on a Chinese textile industry that will take years to catch up to where American factories are today?" If Americans are more efficient than Chinese in making clothes. if America makes better computers and textiles than China does, but our advantage in computers is greater than our advantage in textiles, we should (1) focus on computers, (2) let China make textiles, and (3) trade U.S. According to Ricardo's law of comparative advantage. that there is a flaw in David Ricardo's theory of comparative advantageLOADING.: Patrick J. Buchanan, a former presidential candidate, argues in his book on the global economyLOADING. The opportunity cost for Canada to produce one Smartphone is 0.57 Fitness Bracelets. The opportunity cost for Canada to produce one Smartphone is 1.75 Fitness Bracelet. The opportunity cost for Switzerland to produce one Smartphone is 0.50 Fitness Bracelet. The opportunity cost for Switzerland to produce one Fitness Bracelet is 2.00 Smartphones. Which of the following statements is true? (Enter your response rounded to two decimal places.) Using the numbers in the table, determine which country has a comparative advantage in producing each product. ![]() The opportunity cost of producing one more pound of pasta in Italy isĠ.50 quarts of olive oil. (Enter your response rounded to two decimal places.) The opportunity cost of producing one more pound of pasta in Greece isĢ quarts of olive oil. The opportunity cost of producing one more quart of olive oil in Italy isĢ pounds of pasta. The opportunity cost of producing one more quart of olive oil in Greece isĠ.50 pounds of pasta. The following table shows the hourly output per worker measured as quarts of olive oil and pounds of pasta in Greece and Italy: ![]()
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