Asked by DR KARAM OTAIBI on May 06, 2024
Verified
Answer the question using the accompanying cost ratios for two products, fish (F) and chicken (C) , in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.Singsong: 1F = 2CHarmony: 1F = 4CIf these two nations specialize based on comparative advantage,
A) Singsong will both produce chicken and catch fish.
B) Harmony will both produce chicken and catch fish.
C) Harmony will produce chicken and Singsong will catch fish.
D) Singsong will produce chicken and Harmony will catch fish.
Comparative Advantage
The ability of an individual or group to carry out a particular economic activity more efficiently than another activity, compared to another individual or group.
Constant Costs
Expenses that remain unchanged over a certain range of output or scale of operation.
Cost Ratios
Metrics or measures that compare costs to each other or to some base value to assess financial efficiency or performance.
- Gain insight into the concept of comparative advantage and its role in shaping a country's decisions regarding which products to create and exchange.
Verified Answer
Learning Objectives
- Gain insight into the concept of comparative advantage and its role in shaping a country's decisions regarding which products to create and exchange.
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