Question 1

A) What distinguishes comparative advantage from absolute advantage in production?(1 point)

A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.

A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.

A country has comparative advantage in production when its opportunity costs of producing a good are higher than another country's.

A country has comparative advantage in production when its opportunity costs of producing a good are higher than another country's.

A country has comparative advantage in production when it requires more total inputs than does another country to produce the same output.

A country has comparative advantage in production when it requires more total inputs than does another country to produce the same output.

A country has comparative advantage in production when it requires fewer total inputs than does another country to produce the same output.

A country has comparative advantage in production when it requires fewer total inputs than does another country to produce the same output.

Question 2

A) If both Japan and the United States directed all of their resources to the production of laptops, the United States would produce a greater quantitylaptops in any period of time. Given this information, which of the following is necessarily true?(1 point)

The United States has a comparative advantage in laptop production.

The United States has a comparative advantage in laptop production.

Japan has a comparative advantage in laptop production.

Japan has a comparative advantage in laptop production.

The United States has an absolute advantage in laptop production.

The United States has an absolute advantage in laptop production.

Japan has an absolute advantage in laptop production.

Japan has an absolute advantage in laptop production.

Question 3

A) At most, a country could produce 20,000 units of Good A or 5,000 units of Good B. What is the opportunity cost of producing one unit of Good B in terms Good A?(1 point)

1414 unit of Good B

1 fourth unit of Good B

4 units of Good B

4 units of Good B

4 units of Good A

4 units of Good A

14unit of Good A

, 1 fourth, unit of Good A

Question 4

A)

Use the table to answer the question.

	Apples	Bananas
Country A	500	1500
Country B	800	1600

If all resources of Country A and Country B were dedicated toward the production of either apples or bananas, the maximum production of each is summarized in the table above. In order for both countries to benefit from trade, which country should specialize in banana production, and why?

(1 point)

Country A since it has the comparative advantage in banana production.

Country A since it has the comparative advantage in banana production.

Country A since it has the absolute advantage in banana production.

Country A since it has the absolute advantage in banana production.

Country B since it has the absolute advantage in banana production.

Country B since it has the absolute advantage in banana production.

Country B since it has the comparative advantage in banana production.

Country B since it has the comparative advantage in banana production.

Question 5

A) A country produces books and video games exclusively. In the same time it takes to produce one video game, the country could produce 4 books. If the country currently produces 800 books and 200 video games but would like to consume a combination of 100 video games and 1,400 books, which of the following is true?(1 point)

This is only possible if the country produces 600 more books and 100 fewer video games itself.

This is only possible if the country produces 600 more books and 100 fewer video games itself.

The country might consume 100 video games and 1,400 books following trade.

The country might consume 100 video games and 1,400 books following trade.

The country can produce 600 more books and 100 fewer video games itself, or it can engage in trade.

The country can produce 600 more books and 100 fewer video games itself, or it can engage in trade.

It is impossible for the country to consume a combination of 100 video games and 1,400 books.

It is impossible for the country to consume a combination of 100 video games and 1,400 books.