Table 3-2 Assume That Aruba and Iceland Can Switch Between Producing Coolers

question 212

Multiple Choice

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.

-Refer to Table 3-2.Aruba has a comparative advantage in the production of

• A) coolers and Iceland has a comparative advantage in the production of radios.
• B) radios and Iceland has a comparative advantage in the production of coolers.
• C) both goods and Iceland has a comparative advantage in the production of neither good.
• D) neither good and Iceland has a comparative advantage in the production of both goods.

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Definitions:

Quantity Demanded

The total amount of a good or service consumers are willing and able to purchase at a given price.

Quantity Supplied

Quantity supplied refers to the amount of a good or service that producers are willing and able to sell at a given price over a specific period.

Rationing Gasoline

Rationing gasoline is a control measure where the government limits the amount of gasoline that consumers can purchase, usually in response to supply shortages.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level in a given time period.