Suppose New Zealand Uses One Unit of Labor to Produce

question 4

Multiple Choice

Suppose New Zealand uses one unit of labor to produce a kiwi and two units of labor to produce an apple. Suppose Australia uses two units of labor to produce a kiwi and one unit of labor to produce an apple. In this case, New Zealand:

• A) has a comparative advantage in producing apples.
• B) has a comparative advantage in producing kiwis.
• C) has a comparative advantage in producing both goods.
• D) does not have a comparative advantage in producing either good.

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Definitions:

Strict-Liability Action

Legal action where the defendant is held liable for damages without the need for proof of negligence or fault.

Defective

Referring to a product or good that is flawed or imperfect, failing to meet the required standards or expectations.

Unreasonably Dangerous

Refers to a condition or aspect of a product that poses a risk of harm to consumers or users beyond what would be expected by the ordinary user.

State-Of-The-Art Defense

A legal defense used in product liability, claiming that a product is safe based on the most advanced technology available at the time of production.