Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 36 units of food per year or 18 units of clothing. Which of the following is true?
a. Iceland has both a comparative and absolute advantage in producing food
b. Iceland has a comparative advantage, but not an absolute advantage in producing food.
c. Lavaland has both a comparative and absolute advantage in producing clothing.
d. Lavaland has an absolute advantage, but not a comparative advantage in producing clothing.
d
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Refer to the scenario above. If both nations decide to trade, which of the following statements is true?
A) Hawaii should export both tea and coffee. B) Hawaii should import both tea and coffee. C) Hawaii should export tea and South Carolina should export coffee. D) Hawaii should export coffee and South Carolina should export tea.
Describe briefly how the final value of an iPhone must be equal to the sum of incomes generated by the production of the iPhone
What will be an ideal response?