Practice study guide

Output Food Electronics (no. (no. units/worker/month) units/worker/month) Australia 20 5 Korea 8 4 7. From the production data, which one of the following statements can be made about absolute advantage? a. Korea has an absolute advantage in the production of both food and electronics. FINAL EXAM, ECON 1501 b. Australia has an absolute advantage in the production of both food and electronics. c. Australia has an absolute advantage in the production of food, while Korea has an absolute advantage in the production of electronics. d. Korea has an absolute advantage in the production of food, while Australia has an absolute advantage in the production of electronics. 8. Which one of the following is the opportunity cost of 1 unit of electronics in Australia? a. 5 units of food b. one-fifth of a unit of food C. 4 units of food d. one-quarter of a unit of food 9. Which one of the following is the opportunity cost of 1 unit of electronics in Korea? a. 2 units of food b. one-half of a unit of food c. four units of food d. one-quarter of a unit of food 10. Which one of the following is the opportunity cost of 1 unit of food in Australia? 5 units of electronics b. One-fifth of a unit of electronics C. 4 units of electronics d. one-quarter of a unit of electronics 11. Which one of the following is the opportunity cost of 1 unit of food in Korea? a. 2 units of electronics b. one-half of a unit of electronics c. 4 units of electronics d. one-quarter of a unit of electronics 12. Which one of the following statements can be made about comparative advantage? a. Australia has a comparative in the production of food, while Korea has a comparative advantage in the production of electronics. b. Korea has a comparative advantage in the production of food, while Australia has a comparative advantage in the production of electronics. c. Australia has a comparative advantage in the production of both food and electronics. d. Korea has a comparative advantage in the production of both food and electronics. FINAL EXAM, ECON 1501 13. Which recommendation below would be the best for Korea? a. Specialize in food production, export food, and import electronics b. Specialize in electronics production, export electronics, and import food c. Produce both goods because neither country has a comparative advantage d. Produce neither good because it has an absolute disadvantage in the production of both goods 14. Prices of electronics can be stated in terms of units of food. Which one of the following is the range of prices of electronics for which both countries could gain from trade? a. The price must be greater than 4 units of food but less than 5 units of food. b. The price must be greater than 2 units of food but less than 4 units of food. The price must be greater than one-quarter of a unit of food but less than one-half of a unit of food. d. The price must be greater than one-fifth of a unit of food but less than one- quarter of a unit of food