Suppose That a Worker in Country a Can Make Either

question 82

Multiple Choice

Suppose that a worker in Country A can make either 30 cars or 15 computers each year. Country A has 1,000 workers. Suppose a worker in Country B can make either 60 cars or 20 computers each year. Country B has 600 workers. _____ has the comparative advantage at producing cars, and _____ has a comparative advantage at producing computers.

• A) Country A; Country B
• B) Country B; Country A
• C) Country A; Country A
• D) Country B; Country B

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Definitions:

Income

Earnings received by an individual or entity, usually in the form of wages, salaries, or investments.

Interest Rate

The percentage of a loan charged to the borrower as interest, usually shown as an annual rate of the outstanding loan amount.

Utility Function

A mathematical representation in economics of a consumer's preference ordering over a set of goods and services.

Consumption

The process by which goods and services are used up or consumed by individuals or groups.