Suppose That a Worker in Radioland Can Produce Either 4

question 103

Multiple Choice

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year and a worker in Teeveeland can produce either 2 radios or 5 televisions per year.Each nation has 100 workers,and each country specializes according to the principle of comparative advantage.If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year,then each country's maximum consumption of new radios and televisions per year will be

• A)higher than it would be in the absence of trade because of the gains from trade.
• B)the same as it would be in the absence of trade.
• C)less than it would be in the absence of trade because neither country is specializing in the product in which it has a comparative advantage.
• D)less than it would be in the absence of trade because Teeveeland has an absolute advantage in both goods and so it cannot benefit by trading with Radioland.

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Definitions:

Variance

A statistic that represents the extent to which a set of numbers is spread out, calculating the average of the squared differences from the Mean.

Original Units

The units in which the data was originally measured or collected before any transformations or conversions.

Skewed

A description of a statistical distribution that is not symmetrical, indicating that data points tend to extend more to one side of the mean than the other.

Median

The middle value of a data set when it is ordered from least to greatest, separating the higher half from the lower half.