With a Given Amount of Labour and Other Resources, Producers

question 90

Multiple Choice

With a given amount of labour and other resources, producers in the nation of Alphania can produce either 100 widgets or 50 wackets. Thus, in Alphania two widgets must be given up to produce each wacket. Using the same amount of labour and resources, producers in Betania can produce 40 widgets or 40 wackets-so one widget must be given up for each wacket produced. Based on this information, which statement is true?

• A) Betania has an absolute advantage in producing both goods.
• B) Betania has a comparative advantage in producing wackets.
• C) Alphania has a comparative advantage in producing wackets, but Betania has an absolute advantage in producing wackets.
• D) Alphania has a comparative advantage in producing both goods.

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Definitions:

Belt-driven

Describes mechanisms or devices powered by a belt, which transfers movement and power from one pulley to another.

Pump

A mechanical device used to move fluids or gases from one place to another by creating pressure differential.

Steering Wheel

The component of a vehicle that the driver uses to control the direction of the vehicle by turning it in the desired direction.

Degrees

A unit of measurement used to determine angles or temperature.