The Table Below Shows Units of Wheat and Cloth Produced

question 90

Multiple Choice

The table below shows units of wheat and cloth produced by each worker per day in both the countries.Table 20.1

-Refer to Table 20.1. Which of the following assumptions hold true for the example?

• A)The goods are produced by using different factors of production.
• B)Labor productivity alone determines the comparative advantage for both countries.
• C)Both the countries will produce and export wheat and cloth.
• D)Both the countries have identical factor endowments.
• E)The taste and preference of the consumers are dissimilar in the two countries.

---

Definitions:

Exchange Rate

The value of one country's currency expressed in terms of another country's currency.

United States

A country located in North America, consisting of 50 states and known for its large economy and diverse population.

Greece

A country in southeastern Europe known for its rich history, archaeological sites, and significant contributions to Western civilization's art, philosophy, and politics.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors with the same amount of resources.