b. Which country has the comparative advantage in oats production? In rice production? Venezuela has a comparative advantage in rice and Uruguay has a comparative advantage in cats . 0. Which of the following is true? A. Even though a country may have no absolute advantage in any goods, it may have a comparative advantage in some good. B. If a country has a comparative advantage in some goods, it must have a comparative disadvantage in other goods. C. Even though a country may have an absolute advantage in all goods, it cannot have a comparative advantage in all goods. 3 D. All of the above are true. d. Venezuela has a comparative advantage in rice because, it has a lower relative opportunity cost of production for rice. For Venezuela, the opportunity cost of producing rice in terms of foregone oats is 1.33 bushels of oats for every bushel of rice. (Round your response to two decimal places.) e. Use the tine drawing toot to plot each country's production possibilities boundary on a scale diagram at right. Label the lines properly. Carefuiiy foiiow the instructions above, and oniy draw the required objects. The following table shows the production of oats or rice in Venezuela and Uruguay. Assume that both countries have 9,000 acres of arable land. Venezuela Uruguay Oats 100 bushels per acre 75 bushels per acre Rice 75 bushels per acre 50 bushels per acre a. Which country has the absolute advantage in oats? In rice? Venezuela has the absolute advantage in oats production and Venezuela has the absolute advantage in rice production. b. Which country has the comparative advantage in cats production? In rice production? Venezuela has a comparative advantage in rice and Uruguay has a comparative advantage in cats . Rice (millions of bushels) U1 1 O IIIIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIII 0 5 1015202530 3540 455055 6065 707580 8590 9300 The following table shows how many tonnes of dairy products and beef products can be produced in Country 1 and Country 2 with one unit of equivalent resources. Dairy Products Beef Products (tonnes) (tonnes) Country 1 16 4 Country 2 16 20 p............... \"w...\" .. H..- .. .-..-. W, H... d. Assume that both countries have 100 units of equivalent resources. On a scale diagram with beef products on the horizontal axis and dairy products on the vertical axis, draw each country's production possibilities boundary. Use the line drawing tool to plot each country's production possibilities boundary on a scale diagram at right. Label the lines properly. Carefully follow the instmctions above, and only draw the required objects. Dairy Products 500 1000 1500 2000 2500 3000 3500 4000 4500
