Table 2.8 Table 2.8 Shows the Number of Labour Hours Required to of Labour

question 176

Multiple Choice

Table 2.8

Table 2.8 shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2.8. If the two countries specialise and trade, who should export motorcycles?

• A)There is no basis for trade between the two countries.
• B)Ireland
• C)Scotland
• D)They should both be importing motorcycles.

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Definitions:

Opportunity Cost

The value of the next best alternative foregone as a result of making a decision.

Cakes

Baked desserts that are typically sweet and made from ingredients such as flour, sugar, and eggs.

Absolute Advantage

A scenario in which a country can produce a particular good or service more effectively than another country with the same amount of resources.

Comparative Advantage

an economic principle that posits a country or entity can produce a particular good or service at a lower opportunity cost than its trading partners, leading to beneficial trade.