The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case:
A. Korea has a comparative advantage in the production of wheat
B. The United States has a comparative advantage in the production of televisions
C. Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States
D. Mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States
C. Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States
You might also like to view...
The most significant problem in trying to empirically measure the real rate of interest is that
A) there are so many different types of bonds. B) expected inflation is unobservable. C) interest rates fluctuate so much from day to day. D) banks infrequently change the prime rate of interest.
A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least:
a. 92 cars per day. b. 100 cars per day. c. 104 cars per day. d. 110 cars per day.