Assume that Andia and Zardia can switch between producing wheat and producing be

Question

Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. Minutes Needed to Makel Bushel of WheatPound of Beef Andia Zardia 20 15 12 10 200. Refer to Table 3-1. a. b. c. d. What is Andia's opportunity cost of producing one pound of beef? 3/5 bushel of wheat 6/5 bushels of wheat 4/3 bushels of wheat 5/3 bushels of wheat 201. Refer to Table 3-1. What is Andia's opportunity cost of producing one bushel of wheat? a. b. C. d. 3/5 pound of beef 6/5 pounds of beef 4/3 pounds of beef 5/3 pounds of beef 202. Refer to Table 3-1. What is Zardia's opportunity cost of producing one bushel of wheat? a. 2/3 pound of beef b. 3/4 pound of beef c. 5/6 pound of beef d. 3/2 pounds of beef Refer to Table 3-1. What is Zardia's opportunity cost of producing one pound of beef? a. 2/3 bushel of wheat b. 3/4 bushel of wheat c. 5/6 bushel of wheat d. 3/2 bushels of wheat 203 204. Refer to Table 3-1. Andia has an absolute advantage in the production of wheat and Zardia has an absolute advantage in the production of beef. beef and Zardia has an absolute advantage in the production of wheat. both goods and Zardia has an absolute advantage in the production of neither good. neither good and Zardia has an absolute advantage in the production of both goods. a. b. c. d. 205. Refer to Table 3-1. Andia has a comparative advantage in the production of a. b. c. d. wheat and Zardia has a comparative advantage in the production of beef. beef and Zardia has a comparative advantage in the production of wheat. both goods and Zardia has a comparative advantage in the production of neither good. neither good and Zardia has a comparative advantage in the production of both goods.

Explanation / Answer

200) The opportunity cost of producing one pound of beef for Andia is option (b) 6/5 bushels of wheat

201) The opportunity cost of producing one bushel of wheat for Andia is option (d) 5/3 pounds of beef

Opportunity cost is the benefit one could have received but gave up for the alternative.

202) The Zardia'a opportunity cost of producing one bushel of wheat is option (a) 2/3 pound of beef

203) The Zardia's opportunity cost of producing one pound of beef is option (b) 3/4 bushel of wheat

204) Andia has an absolute advantage in the production of option (d) neither good and Zardia has an absolute advantage in the production of both goods

Absolute advantage is the ability of a country to produce a good at a lower cost per unit than the other country.

205) Andia has a comparative advantage in the production of option (a) wheat and zardia has a comparative advantage in the production of beef.

Comparative advantage is the ability of a country to produce a good more efficiently than the other country.

206)Andia should specialize in the production of option (c) both goods and zardia should specialize in the production of neither good.

207)Assume that Andia and zardia each has 60 minutes available.If each person spends all his time producing good in which he has a comparative advantage then total production is option (b) 3.5 bushels of wheat and 5.5 pounds of beef.

208) At which of the following prices would andia and zardia gain from trade with each other?

Option (d) Andia and Zardia could not both gain from trade with each other at any price.

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