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Quiz1-2 - have the absolute advantage in producing that...

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Table 3-1 Labor Hours Needed to Make 1 Cooler Radio Aruba 2 5 Iceland 1 4 6) Refer to Table 3-1. Which of the following represents Aruba's production possibilities frontier when 100 labor hours are available? a. b. c.
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d. 7) Refer to Table 3-1. Assume that Aruba and Iceland each has 40 labor hours available. If Aruba and Iceland specialize and trade based on the principle of comparative advantage, then both countries could benefit, provided they agree that one radio will trade for somewhere between 8) If a country has the comparative advantage in producing a product, then that country must also
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Unformatted text preview: have the absolute advantage in producing that product. a. T b. F Quiz1 Answer Section MULTIPLE CHOICE 6. ANS: C PTS: 1 DIF: 2 REF: 3-1 NAT: Analytic LOC: Understanding and applying economic models TOP: Production possibilities frontier MSC: Applicative 7. ANS: D PTS: 1 DIF: 3 REF: 3-2 NAT: Analytic LOC: Gains from trade, specialization and trade TOP: Comparative advantage | Specialization | Trade MSC: Analytical TRUE/FALSE 8. ANS: F PTS: 1 DIF: 2 REF: 3-2 NAT: Analytic LOC: Gains from trade, specialization and trade TOP: Absolute advantage | Comparative advantage MSC: Interpretive...
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