Micro_StudyQuestions_for_Final

The ability to produce a good at a lower opportunity

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51. The ability to produce a good at a lower opportunity cost than others is called: a. a complementary advantage b. a comparative advantage c. a differential advantage d. an indigenous advantage e. an absolute advantage 52. If there is no comparative advantage in the production of either of the two goods produced by countries 1 and 2, then: EXHIRIT D Units of Wine and Cheese per Day from the same quantity of resources for both Cameroon and Nigeria Cameroon Nigeria Wine Cheese Wine Cheese 5 0 6 0 0 10 0 18 53. In Exhibit D, Nigeria's opportunity cost of producing 1 unit of cheese is: 54. From Exhibit D which of the following statements is NOT correct? 55. Assume that by devoting all of its resources to the production of X, Cameroon can produce 40 units of X. By devoting all of its resources to Y, Cameroon can produce 60Y. Comparable figures for Ghana are 60X and 40Y. We can conclude that: a. the terms of trade will be 3X equals 1Y. b. Cameroon should specialize in Y and Ghana in X. c. Cameroon should specialize in X and Ghana in Y.
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d. there is no basis for mutually beneficial specialization and trade. 56. Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. If this economy was entirely closed to international trade, equilibrium price and quantity would be: 57. Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. If the economy is opened to free trade, the price and quantity sold of this product would be: 58. Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product. With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:
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