Refer to Table 9-6
Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize gain compared to the "without trade" numbers? A) -100 B) 100 C) 120 D) 250
The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. C) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods. D) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods.
In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is A) comparative advantage works better in theory than in practice. B) some countries have more resources than other countries. C) tastes for many traded goods are similar in many countries because of globalization. D) production of most goods involves increasing opportunity costs.
Tastes for products such as beer differ.As a result A) we see countries specializing completely in the production of beer. B) consumers of beer have difficulty deciding what type of imported beer to buy. C) the quality of imported beer is less than it could be. D) different countries may each have a comparative advantage in producing different types of beer.