pinkie_pup
New member
The following table shows production capacities in terms of output per worker for Romania and Argentina. For example, Romania can produce 200 pairs of scissors per worker.
Romania produces 200 pairs of scissors and 800 barrels of wine
Argentina produces 800 pairs od scissors and 1,200 barrels of wine
Does either country have a comparative advantage in the production of scissors or wine?
A. Neither Romania nor Argentina has a comparative advantage over the other.
B. Argentina has a comparative advantage in scissors and Romania has a comparative advantage in wine.
C. Romania has a comparative advantage in both scissors and wine.
D. Argentina has a comparative advantage in wine and Romania has a comparative advantage in scissors.
E. Argentina has a comparative advantage in both scissors and wine.
Suppose Romania and Argentina each have 1,000 units of labor. Assume that each country completely specializes in its comparative advantage if they trade with one another, and that the terms of trade are 1 barrel of wine for 1 pair of scissors.
Can both Romania and Argentina benefit from trade if the countries trade 200,000 barrels of wine for 200,000 pairs of scissors?
A. No
B. Yes
Romania produces 200 pairs of scissors and 800 barrels of wine
Argentina produces 800 pairs od scissors and 1,200 barrels of wine
Does either country have a comparative advantage in the production of scissors or wine?
A. Neither Romania nor Argentina has a comparative advantage over the other.
B. Argentina has a comparative advantage in scissors and Romania has a comparative advantage in wine.
C. Romania has a comparative advantage in both scissors and wine.
D. Argentina has a comparative advantage in wine and Romania has a comparative advantage in scissors.
E. Argentina has a comparative advantage in both scissors and wine.
Suppose Romania and Argentina each have 1,000 units of labor. Assume that each country completely specializes in its comparative advantage if they trade with one another, and that the terms of trade are 1 barrel of wine for 1 pair of scissors.
Can both Romania and Argentina benefit from trade if the countries trade 200,000 barrels of wine for 200,000 pairs of scissors?
A. No
B. Yes