Table 2-20 Table 2-20 Shows the Number of Labor Hours

question 35

Multiple Choice

Table 2-20
Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand.
-Refer to Table 2-20. If the two countries specialize and trade, who should export rice?

• A) There is no basis for trade between the two countries.
• B) Japan
• C) Thailand
• D) They should both be exporting rice.

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Definitions:

Ordinal Utility Function

Utility function that generates a ranking of market baskets in order of most to least preferred.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget and prices.

Slope

The rate at which a line or curve inclines or declines, indicating the steepness.

Preferences

The subjective tastes and desires that guide consumers in making their choice among various goods and services.