Suppose That a Worker in Country a Can Make Either

question 127

Multiple Choice

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.The workers in Country B will benefit from trade if they:

• A) specialize in bananas because they have a comparative advantage in banana production.
• B) specialize in tomatoes because their opportunity cost of tomatoes is higher than Country A's.
• C) specialize in tomatoes because their opportunity cost of tomatoes is lower than Country A's.
• D) specialize in bananas because they have an absolute advantage in banana production.

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Definitions:

Daniel Webster

A leading American statesman and senator known for his advocacy for the Union and his key role in debates surrounding constitutional law and the Nullification Crisis.

National Government

The organization having central governmental authority in a nation, responsible for national policy and administration.

Sovereign States

Independent and self-governing political entities recognized by international law, possessing complete authority over their territory and governing institutions.

Congress

America's law-making entity, comprising two branches: the Senate and the House of Representatives.