Assuming Labour Forces of Equal Size, the Production Possibilities Curves

question 167

Multiple Choice

Assuming labour forces of equal size, the production possibilities curves below suggest that West Mudsville has:

• A) lower wages than workers in East Mudsville before trade but equal wages after trade.
• B) absolute advantage over East Mudsville for both baseballs and, baseball hats.
• C) no advantage over East Mudsville.
• D) advantage of East Mudsville for baseballs and not baseball hats.

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Definitions:

Test Statistic

A quantity derived from sample data used to make a decision about a hypothesis test.

Z

'Z' often represents the Z-score in statistics, which is the number of standard deviations a data point is from the mean of the data set.

Square

A polygon with four equal sides and four right angles.

Relationship

How two or more notions, entities, or persons are associated, or the status of association.