Scenario: Foodland and Drinkland

question 56

Multiple Choice

Scenario: Foodland and Drinkland
Two countries, Foodland and Drinkland, produce food and drinks. In Foodland, one resource unit produces 20 tons of food and one resource unit produces 10 tons of drinks. In Drinkland, one resource unit produces 12 tons of food and one resource unit produces 24 tons of drinks.
Food Drinks
Foodland 20 10
Drinkland 12 24
-Which of the following statements is true of the above scenario?

• A) Foodland has a comparative advantage in producing drinks.
• B) Drinkland cannot trade with Foodland because trade is too expensive.
• C) Drinkland has an absolute advantage in producing drinks.
• D) Foodland should stop producing food and just produce drinks.

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Definitions:

Conviction

A firmly held belief or opinion, or the formal declaration that someone is guilty of a criminal offense based on a trial or plea.

Decision Schemes

Structured approaches or strategies used in the process of making choices or solving problems.

Realistic Conflict Theory

A social psychological model that suggests intergroup conflicts and hostility arise from competition over limited resources.

Cohesiveness

The quality of forming a united whole, often used to describe the degree of camaraderie and solidarity within a group.