Assume That the World Economy Consists of Two Countries: Russia

question 27

Multiple Choice

Assume that the world economy consists of two countries: Russia and Republic of Belarus. Each country can produce tomatoes and potatoes. Russia can produce 1000 tons of tomatoes or 3000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 3 × tomatoes = 3000. Republic of Belarus can produce 500 tons of tomatoes or 1000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 2 × tomatoes = 1000. Countries can freely trade with each other.
-Which country has absolute advantage in producing potatoes?

• A) Russia
• B) Republic of Belarus
• C) Both countries
• D) Neither country

---

Definitions:

Cash Cow

A business unit or product that generates a consistently high amount of cash flow, exceeding its maintenance and development costs, typically funding other business areas.

BCG Matrix

A tool to analyze business opportunities according to market growth rate and market share.

SWOT Analysis

A strategic planning tool used to identify the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.

Organizational Strengths

The attributes and capabilities that give an organization a competitive edge in the market.