What does it mean for a country to have a comparative advantage in producing a product?
What will be an ideal response?
A country has a comparative advantage in producing a product when it has the ability to produce that product at a lower opportunity cost than competitors.
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If you pay a premium of 10 cents per bushel for a Corn put option with a strike price of $6.60, what's the most you can lose?
A. $0.10/bu B. $6.60/bu C. $6.70/bu D. Your potential loss is unlimited
If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following would explain this pattern of trade?
A) The opportunity cost of producing fishing poles in Canada is higher than the opportunity cost of producing bacon in Mexico. B) Mexico has a higher opportunity cost of producing fishing poles than Canada, and Canada has a higher opportunity cost of producing bacon. C) Mexico must have an absolute advantage in producing fishing poles and Canada must have an absolute advantage in bacon. D) Mexico has a lower opportunity cost of producing bacon than Canada and Mexico has a comparative advantage in producing fishing poles.