Econ_002_worksheet_wk_1 - Worksheet for comparative...

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Worksheet for comparative advantage. Comparative advantage We know the following about Maine and New Hampshire. In Maine In New Hampshire Labor Hours Required to Produce 1 Gallon of Grape juice 1 hour 9 hours Labor Hours Required to Produce 1 Gallon of Apple juice 5 hours 6 hours ____ 1. According to the table above, the opportunity cost of producing 1 gallon of grape juice in New Hampshire is _____ gallon(s) of apple juice. a) 1.33 b) 5/6 c) 1.5 d) 6 e) 2/3 ____ 1 In the table above, New Hampshire has a comparative advantage in producing a) neither good. b) grape juice. c) both apple and grape juice. d) apple juice. e) There is not enough information to say. ____ 1. If the terms of trade were ____ gallon(s) of grape juice for 1 gallon of apple juice, both New Hampshire and Maine would gain from trade. a) 6 b) 3 c) 0.5 d) 0.25 e) 10 Discuss these statements . “a nation that has an absolute advantage in producing two goods will have a comparative advantage in both goods.” “Poor nations and nations with very little resources will not have any comparative advantage.” “A person with an IQ less than 120 will have a lower chance of having a comparative advantage.”
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This note was uploaded on 02/22/2009 for the course ECON 002 taught by Professor Staff during the Spring '06 term at Cornell University (Engineering School).

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Econ_002_worksheet_wk_1 - Worksheet for comparative...

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