Suppose an American Worker Can Make 20 Pairs of Shoes

question 29

Multiple Choice

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce _____ because it has a(n) _____ and should _____.

• A) both goods; absolute advantage in both goods; not trade
• B) only shoes; comparative advantage at producing shoes; trade for apples.
• C) only apples; comparative advantage at producing apples; not trade
• D) only apples; comparative advantage at producing apples; trade for shoes.

---

Definitions:

Original Contract

The initial agreement made between parties, detailing the terms, conditions, and obligations to which all parties have agreed.

Negotiated Rulemaking

A process in administrative law where regulators develop rules by involving those who will be significantly affected by them, aiming for consensus.

Agencies

Organizations established to provide specific services, often involved in the administration of public policies or services.

Mediation

A form of alternative dispute resolution where a neutral third party helps disputing parties reach a voluntary, negotiated agreement.