Assume the United States and Australia have the same amount of resources. In a given time period, the United States can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that
A. Australia has an absolute advantage in both beef and cars.
B. The United States has a comparative advantage in beef.
C. The United States has an absolute advantage in both beef and cars.
D. Australia has a comparative advantage in cars.
Answer: C
You might also like to view...
In the United States the system most generally used for assigning tasks and distributing benefits
A) employs continuing bids and offers among individuals. B) operates without the use of money prices. C) presupposes shifting and uncertain property rights or "rules of the game." D) takes the place of the supply-and-demand process. E) was designed by the authors of the Federal Constitution.
Experience with the Phillips curve since the 1970s has shown that the:
a. curve can be used as a reliable model to guide public policy. b. relationship between the inflation rate and the unemployment rate moves in a clockwise direction. c. curve is not stable. d. inflation rate and the unemployment rate are equal.