The Table Given Below Shows the Number of Labor Hours

question 57

Multiple Choice

The table given below shows the number of labor hours required to produce 1 umbrella and 1 bushel of corn in the U.K. and the Rest of the World. The United Kingdom has an absolute advantage in the production of _____. $$\begin{array} { | c | c | c | } \hline \text { Labor hours to make: } & \text { In the Urited Kingdorn } & \text { In the Rest of the World } \\\hline \text { l umbrella } & 3.00 & 2.00 \\\hline \text { 1 bushel of corn} & 1.00 & 0.25 \\\hline\end{array}$$

• A)neither corn nor umbrella
• B)both corn and umbrella
• C)only corn
• D)only umbrella

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Definitions:

Initial Endowment

The initial quantity of goods, resources, or wealth that an individual or entity possesses at the start of a period or game.

Pareto Optimal

A distribution of resources from which it is impossible to reallocate in order to make any individual better off without making at least one individual worse off.

Initial Endowment

The initial quantity of assets, goods, or resources that an agent or economy possesses at the start of a period.

Competitive Equilibrium

A state in a market where supply equals demand, and no participant has the ability to influence prices.