The Table Below Shows Units of Wheat and Cloth Produced

question 18

Multiple Choice

The table below shows units of wheat and cloth produced by each worker per day in both the countries.
Table 20.1

-Refer to Table 20.1. Which of the following assumptions holds true for the example?

• A) The goods are produced by using different factors of production
• B) Labor productivity alone determines the comparative advantage
• C) Each of the countries will produce and export wheat and cloth
• D) Both the countries have identical factor endowments
• E) The taste and preference of the consumers are dissimilar in the two countries

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Definitions:

Collusion

An agreement between firms, typically secret, to limit competition among themselves, such as by setting prices or output levels.

Diagram

A simplified drawing showing the appearance, structure, or workings of something in a conceptual or visual form.

Profits

The financial gain realized when the revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Game Theory Matrix

A tabular representation used in game theory to display the payoffs for each player for every possible combination of strategies.