If 50 Units of Resources Can Produce Either 1 Ton

question 118

Multiple Choice

If 50 units of resources can produce either 1 ton of sugar beets or 100 lb.of ham in Germany,while 90 units of resources can produce either 2 tons of sugar beets or 300 lb.of ham in Poland,

• A)Poland has a comparative advantage in producing both goods
• B)Germany has a comparative advantage in producing sugar beets
• C)neither country has an absolute advantage in producing sugar beets,but Poland has an absolute advantage in producing ham
• D)Germany can produce more ham than Poland can
• E)mutually beneficial international trade is not possible

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Definitions:

Economic Efficiency

A situation where resources are allocated in the most effective way, maximizing total benefits while minimizing waste and costs.

Competitive Markets

Markets characterized by a large number of buyers and sellers, where no single entity can influence prices significantly.

Government Intervention

Actions taken by the government to influence or directly regulate economic activity, markets, or distribution of resources.

Price Ceiling

A legal maximum on the price at which a good can be sold.