The MacDougall study of comparative advantage hypothesized that in those industries in which U.S.labor productivity was relatively high, U.S.exports to the world should be lower than U.K.exports to the world, after adjusting for wage differentials.

Question

Quizplus · Accepted Answer

The information presented in the first sentence is not directly related to the production possibilities frontier shown in Figure 2.3. The MacDougall study is discussing comparative advantage and wage differentials, whereas the production possibilities frontier illustrates the concept of trade-offs between two goods or services when resources are limited.

The MacDougall Study of Comparative Advantage Hypothesized That in Those