Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of...
Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of 10 million each. Debra also has a linear production possibilities curve that shows maximum production of 9 million trucks or 3 million computers.
Based on the graphs, which of the following statements is true?
| Debra has an absolute advantage in the production of computers. |
| Debra has an absolute advantage in the production of trucks. |
| Debra has an absolute advantage in the production of computers. |
| Mike has a comparative advantage in the production of computers. |
Homework Answers
Maximum production for Mike: 10 million trucks and 10 million computers.
Maximum production for Debra: 9 million trucks and 3 million computers.
Since Mike has greater production in both goods, Mike has an absolute advantage both in the production of trucks as well as that in computers.
However, see that opportunity cost for Mike for production of computers = 10/10 = 1 truck/computer
Opportunity costs for Debra for production of computers = 9/3 = 3 truck/computer.
Hence Mike has more efficiency in making computers and thus he has a comparative advantage in the production of computers.
Correct Ans - D
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Mike has a linear production possibilities frontier that shows
maximum production of trucks or computers of...
Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of...
Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of 10 million each. Debra also has a linear production possibilities curve that shows maximum production of 9 million trucks or 3 million computers.
A country's consumption possibilities frontier can be outside its production possibilities frontier if a
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able Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing...
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Part I. Under what conditions is the production possibilities frontier linear rather than bowed out Explain...
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QUESTION 9 When a country a produces on its production possibilities frontier involving two goods, then...
QUESTION 9 When a country a produces on its production possibilities frontier involving two goods, then trade with other countries can be beneficial if it specializes in the production of the good in which it has a comparative disadvantage True False
0.25 points9) Refer to the above table which shows the alternative outputs which can be produced...
0.25 points9) Refer to the above table which shows the
alternative outputs which can be produced in 2 different countries
with 1 year of labor. It can be concluded that Sweden has a(n)
A.) absolute advantage in both goods and a comparative advantage
only in autos.
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in both goods.
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able Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing the third unit of consumer goods is units of capital goods. Table: Production Possibilities Schedule I Alternatives Consumer goods per period 0 Capital goods per period 30 28 24 1810 8 2 (Figure: Comparative Advantage) Use Figure: Comparative Advantage. Westland has a comparative advantage in producing: Figure: Comparative Advantage Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges, and...
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QUESTION 9 When a country a produces on its production possibilities frontier involving two goods, then trade with other countries can be beneficial if it specializes in the production of the good in which it has a comparative disadvantage True False
0.25 points9) Refer to the above table which shows the
alternative outputs which can be produced in 2 different countries
with 1 year of labor. It can be concluded that Sweden has a(n)
A.) absolute advantage in both goods and a comparative advantage
only in autos.
B.) absolute advantage in both goods and a comparative advantage
only in computers.
C.) absolute advantage in both goods and a comparative advantage
in both goods.
D.) absolute advantage in both goods and a...
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