The Table Below Shows Labor-Productivity Figures in Two Countries Facing

question 113

Multiple Choice

The table below shows labor-productivity figures in two countries facing constant costs: Refer to the table above. Based on the data provided, it can be deduced that:

• A) Country A has the absolute advantage in producing both meat and houses
• B) Country B has the absolute advantage in producing both meat and houses
• C) Country A has a comparative advantage in producing both meat and houses
• D) Country B has a comparative advantage in producing both meat and houses

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Definitions:

Permanent Tax

A tax implemented with no predetermined end date, often considered to be indefinitely applied.

Temporary Tax

A temporary tax is a levy imposed by a government for a specific period before it is automatically revoked or reassessed.

Major Export

The primary good or service sold by a country to foreign markets.

U.S.

The United States of America, a federal republic consisting of 50 states and a federal district.