Country A can produce 10 coolers per day or 4 radios per day. Country B can prod
ID: 1117461 • Letter: C
Question
Country A can produce 10 coolers per day or 4 radios per day. Country B can produce 20 coolers per day or S radios per day. Productivity is summarized in Table 3-2. Assume that the rate of productivity is constant. For example, Country A can produce 2 radios in a half day; 1 radio in a quarter day; and 8 radios in two days. Table 3-2 Productivity Per Day Coolers Radios Country A 10 4 Country B 20 4 Refer to Table 3-2. Country A's opportunity cost of one cooler is a. 0.4 radio. b. 4.0 radios. c. 0.25 radio. d. 2.5 radios. 5. Refer to Table 3-2. Country A has a comparative advantage in the production of a. 6. s a comparative advantage in the production of radios. radios and Country B has a comparative advantage in the production of coolers. both goods and Country B has the absolute advantage in the production of both goods. neither good and Country B has an absolute advantage in the production of both goods. c. d. 7. Demand is said to be "unit price elastic" if its price elasticity isExplanation / Answer
Ans)
5.
a. 0.4 radios
10 coolers= 4 radios
1 cooler=4/10 radio
1 cooler=0.4 radio
6.
b.radios and Country B has a comparative advantage in the production of coolers.
Country A can produce 1 cooler for 0.4 radio and country B can produce 1 cooler for 5/20=0.25 radios.Since country B has a lower opportunity cost thus country B has a comparative advantage in producing Coolers and country A in radios.