The Following Data Outline Production Choices (A or B) in Two

question 39

Multiple Choice

The following data outline production choices (A or B) in two nations, Landia and Scandia. Landia has a workforce of 12 and Scandia has a workforce of 10.

$$\begin{array} { | l | c | c | c | c | c | c | } \hline { \text { Output per worker in Landia } } & & && { \text { Output per worker in Scandia } } \\\hline & \mathrm { A } & \mathrm { B } & & & \mathrm { A } & \mathrm { B } \\\hline \text { Fish } & 8 & 0 & & \text { Fish } & 16 & 0 \\\hline \text { Chips } & 0 & 40 & & \text { Chips } & 0 & 48 \\\hline\end{array}$$

-On the basis of these data,we can say that:

• A)Landia has a comparative advantage in chips while Scandia has a comparative advantage in fish
• B)Landia has a comparative advantage in fish while Scandia has a comparative advantage in chips
• C)both Landia and Scandia have a comparative advantage in fish
• D)both Landia and Scandia have a comparative advantage in chips
• E)neither Landia nor Scandia has a comparative advantage in chips

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Definitions:

Tax Revenue

Money collected by governments through the imposition of taxes.

Widgets

A generic term often used to refer to any product, especially a hypothetical one used for economic or teaching purposes.

Tax

A mandatory monetary fee or another form of charge levied on a taxpayer by a government body to finance government operations and various public expenses.

Elastic

Describes a situation in which the demand or supply of a good or service is highly sensitive to changes in price.