Scenario 20.2 Suppose Labor Productivity Differences Are the Only Determinants of Comparative

question 75

Multiple Choice

Scenario 20.2
Suppose labor productivity differences are the only determinants of comparative advantage, and both Egypt and Ghana produce only corn and cocoa. In Egypt, 10 bushels of corn or 15 pounds of cocoa can be produced in a day. In Ghana, one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa.
-The Dutch Disease had occurred in Netherlands because:

• A)the Netherlands government had borrowed heavily from the World Bank to meet its Balance of Payment deficits.
• B)the price of the primary commodities declined in the international market.
• C)the demand for natural gas exports from Netherlands increased substantially.
• D)the currency of Netherlands depreciated in the international market.
• E)the price of the commodities manufactured by Netherlands declined in the international market.

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Definitions:

Condemned To Be Free

A notion popularized by existentialist philosopher Jean-Paul Sartre, suggesting that with the absence of God or predetermined essence, humans are free to make their own choices, yet are responsible for these choices.

Jean-Paul Sartre

A 20th-century French existentialist philosopher, playwright, novelist, political activist, biographer, and literary critic, known for his works on existentialism and phenomenology.

Kant

Immanuel Kant, an 18th-century German philosopher whose work in epistemology, ethics, and aesthetics had a profound influence on modern thought.

Deterministic Way

An approach that holds all events, including human actions, are ultimately determined by causes external to the will, implying a lack of free will.