Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?
A. The United States has the absolute advantage in the production of both shoes and apples.
B. Canada has the absolute advantage in the production of both shoes and apples.
C. The United States has the absolute advantage in the production of shoes and Canada has the absolute advantage in the production of apples.
D. Canada has the absolute advantage in the production of shoes and the United States has the absolute advantage in the production of apples.
A. The United States has the absolute advantage in the production of both shoes and apples.
You might also like to view...
What role can confidence and fear play in the economy?
A. Confidence and fear can shift the AD curve inward but not outward. B. Confidence and fear can shift the AD curve outward and inward, respectively. C. The impact of confidence and fear has not been effectively incorporated into macroeconomic models. D. Confidence and fear can shift the SRAS upward and downward, respectively.
Which of the following would not shift the supply curve?
A) A rise in the price of the good B) A fall in the expected future price of the good C) A rise in the costs of production of the good D) A negative supply shock that destroys a portion of output