If Canada can produce 500 TV sets at the cost of 10 cars, while Mexico can produce 1,000 TV sets at the cost of 8 cars, we know the following:
a. Canada has a comparative advantage in TV production.
b. Mexico has the absolute advantage in TV production.
c. The two countries' joint output equals 1,500 TV sets and 18 cars without trade, but it will be higher after proper specialization and trade.
d. Canada has a comparative advantage in car production.
e. Canada produces more cars than Mexico does.
D
You might also like to view...
The European Union established a cap-and-trade system which was designed to
A) eliminate air pollution and greenhouse gases by the year 2020. B) reduce carbon dioxide emissions. C) remove all taxes from polluting industries. D) provide fast growing developing countries with the technology to reduce their carbon emissions.
As a consumer consumes more and more of a product in a particular time period, eventually marginal utility
A) rises. B) is constant. C) declines. D) fluctuates.