Using the above figure determine which country has the comparative advantage in the production of corn. In addition, determine which has the comparative advantage in the production of barley
What will be an ideal response?
The United States has the comparative advantage in the production of barley. The reason is that the opportunity cost to the United States for producing one bushel of barley is one bushel of corn. By contrast, Mexico's opportunity cost of one bushel of barley is two bushels of corn. Since the opportunity cost of producing one bushel of corn in Mexico is one-half of a bushel of barley that gives Mexico the comparative advantage in the production of corn.
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If the cross elasticity of demand between good A and good B is negative, then a decrease in the price of good A results in
A) an increase in the demand for good B. B) a decrease in the demand for good B. C) a movement downward along the demand curve for good B. D) an increase in the supply of good B. E) a decrease in the supply of good B.
Indiana's health care plan for state employees:
A. has reduced total spending on health care, but at the cost of employees forgoing important preventative care procedures. B. has reduced total spending on health care without people forgoing important preventative care procedures. C. has increased total spending on health care, but with the benefit of increasing the overall health of state workers who now take greater advantage of preventative care procedures. D. has reduced health care spending for those who participate in the plan, but only a small (less than 10 percent) percentage of state employees actually use the system.