The United States Requires 20 Hours of Labor to Produce

question 151

Multiple Choice

The United States requires 20 hours of labor to produce 1 ton of steel and 30 hours of labor to produce 1,000 board feet of lumber. In Canada, 20 hours of labor are required to produce 1 ton of steel and 25 hours of labor to produce 1,000 board feet of lumber. Which country has a comparative advantage in the production of lumber?

• A) the United States
• B) Canada
• C) Neither the United States nor Canada has a comparative advantage.
• D) Both the United States and Canada have a comparative advantage.

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Definitions:

Random Experiment

An experiment or process that leads to uncertain outcomes, each with definable probabilities.

Binomial Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent states across a series of experiments or trials.

Expected Value

The sum of all possible values each multiplied by the probability of its occurrence, often used in probability theory to predict the average outcome of a random event over the long term.

Binomial Probability Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent states under a given number of observations or trials.