97.Assume Australia can use a given amount of its resources to produce either 20 caravans or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles. Australia should specialise in:A.caravans.B.automobiles.C.both goods.D.neither good.ANS:APTS:1DIF:DifficultREF:Comparative advantageOBJ:TYPE: CATOP:Comparative advantage98.According to the principle of comparative advantage, total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions?99.Which of the following statements is true?100.Suppose rice can be produced in country X at a lower cost than in country Y, while tuna can be produced in country Y at a lower cost than in country X. International competition will:
101.If a country has a comparative advantage in the production of all goods, it should:A.specialise in the production of goods with the lowest opportunity cost.B.specialise in the production of goods with the highest opportunity cost.C.specialise in the production of goods with the absolute advantage.D.specialise in the production of goods without the absolute advantage.E.not specialise at all and produce all the goods itself.ANS:APTS:1DIF:ModerateREF:Comparative advantageOBJ:TYPE: SATOP:Comparative advantage
You've reached the end of your free preview.
Want to read all 27 pages?