Suppose an American Worker Can Make 50 Pairs of Gloves

question 46

Multiple Choice

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.Using the concept of absolute advantage,which of the following statements is true?

• A)The United States has the absolute advantage in the production of both gloves and radishes.
• B)The United States does not have the absolute advantage in the production of either gloves or radishes.
• C)The United States has the absolute advantage in the production of gloves,but not radishes.
• D)The United States has the absolute advantage in the production of radishes,but not gloves.

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Definitions:

Tax

is a compulsory financial charge or some other type of levy imposed on a taxpayer by a government organization in order to fund government spending and various public expenditures.

Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price or other economic variable.

Buyer

A person or entity that purchases goods or services from another in exchange for money.

Tax

A non-optional financial assessment or alternate form of contribution demanded from a taxpayer by a governmental administration for the purpose of allocating funds for government usage and various public expenditure needs.