Use the Following to Answer Question(s): the Production of Tires

question 68

Multiple Choice

Use the following to answer question(s) : The Production of Tires and Radios

-(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.We see from the table that Country X:

• A) has an absolute advantage in the production of both goods and a comparative advantage in the production of tires.
• B) has an absolute advantage in the production of both goods and a comparative advantage in the production of radios.
• C) does not have an absolute advantage in the production of either good, but it has a comparative advantage in the production of tires.
• D) does not have an absolute advantage in the production of either good, but it has a comparative advantage in the production of radios.

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Definitions:

Simultaneous Move Games

Games in game theory where players make their decisions at the same time without knowing the choices of the other players.

Sequential Move Games

A type of strategic game in game theory where players make decisions or moves one after another in a predefined order.

Antitrust Laws

Legislation intended to promote competition and prevent monopolies by regulating anti-competitive conduct among businesses.

Price Fixing

An illegal agreement between competitors to fix prices at a certain level, rather than letting them fluctuate naturally with market forces.