Given the Information in the Table Above, Home's Opportunity Cost

question 27

Multiple Choice

Given the information in the table above, Home's opportunity cost of widgets is

• A) 0.5.
• B) 2.0.
• C) 6.0.
• D) 1.5.
• E) 3.0.

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Definitions:

Imports

Goods or services bought from foreign countries for domestic consumption or use.

Free Trade

International trade left to its natural course without tariffs, quotas, or other restrictions.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity can produce the same good or service.

Comparative Advantage

The endowment of a person, enterprise, or nation to output a good or service at a diminished opportunity cost relative to rival entities.