The US Can Produce Pizza for $7

question 25

Multiple Choice

The U.S. can produce pizza for $7.50 each and barrels of beer for $37.50 each, and Germany can produce pizza for €5 each and barrels of beer for €15 each (€ is the symbol for the euro, the currency Germany uses) . If the exchange rate is 1.50 $/€ then

• A)the U.S. has a comparative advantage in the production of beer.
• B)neither country has a comparative advantage in the production of beer.
• C)the U.S. has a comparative advantage in the production of pizza.
• D)the U.S. has a comparative advantage in the production of beer and pizza.

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Definitions:

Human Resource Management

The strategic approach to managing people in an organization in a way that maximizes their contribution to the achievement of the organization's objectives.

Labor Unions

Organizations formed by workers from related sectors to work towards their mutual interests.

Healthy Working Relationship

A positive and productive interaction between employers and employees characterized by mutual respect, good communication, and a collaborative approach to solving workplace issues.

Human Resources School

A perspective in industrial relations that emphasizes the management of human resources to achieve organizational efficiency and employee satisfaction.