Figure 16-1 Number of Workers Needed to Produce One Unit of Each

question 25

Multiple Choice

Figure 16-1
Number of workers needed to produce one unit of each of the following goods:

-What can be said regarding comparative advantage in production for the two countries shown in Figure 16-1?

• A)Colombia has a comparative advantage in producing both calculators and radios.
• B)Korea has a comparative advantage in producing radios and Colombia has a comparative advantage in producing calculators.
• C)Korea has a comparative advantage in producing both radios and calculators.
• D)Neither country has a comparative advantage in producing radios.
• E)Colombia has a comparative advantage only in producing radios.

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Definitions:

Nonrivalry

A characteristic of certain goods where the consumption by one individual does not reduce availability to others, often seen in digital or public goods.

Nonexcludability

A characteristic of certain goods where it is difficult or impossible to prevent someone from using the good once it has been provided.

Optimal Quantity

The amount of a good or service that yields the maximum benefit or utility to the consumer or producer.

Marginal Cost

The cost of producing one additional unit of a good or service, important in making decisions about production levels and pricing.