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8. Suppose that Russia and Canada have the unit labor requirements for producing bread and butter shown in the table at the right. Then

 

  Russia Canada
Bread 3 8
Butter 2 1

a. Canada has a comparative advantage in butter.

b. Russia has a comparative advantage in bread.

c. Canada has an absolute advantage in bread.

d. all of the above

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Raushan Raj
Raushan RajLv8
2 Nov 2020

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Related questions

7) Refer to Table 33-3. From the data we can conclude that: A) Canada has a comparative advantage in oil and Mexico in soybeans B) Canada has a comparative advantage in soybeans and Mexico in oil C) Canada has a comparative advantage in both goods D) Mexico has a comparative advantage in both goods E) neither country has a comparative advantage in either good

11. Mexico and Canada produce both oil and apples using labour only. A barrel of oil can be produced with 4 hours of labour in Mexico and 8 hours of labour in Canada. A bushel of apples can be produced with 8 hours of labour in Mexico and 12 hours of labour in Canada. Canada has A) an absolute advantage in oil production. B) an absolute advantage in apple production. C) a comparative advantage in oil production. a comparative advantage in apple production. E) none of the above. D)

Market for bread

Price Quantity demanded Quantity supplied
50 0 40
40 10 30
30 20 20
20 30 10
10 40 0
0 50 0

1. What is the equilibrium price and quantity in this market?

2. Suppose that the price of butter falls dramatically (due to lower butter production costs) so that the quantity demanded for bread increases by 40 units at any price. By how much does the price of bread change? By how much does quantity change?

3. Suppose that bread buyers are forced to wait in long lines in order to buy bread. If the value of their time can be estimated at $10/ hour, about how long would you expect people to be waiting in line to get a loaf of bread?

4. Suppose the government wishes to alleviate the problems caused by upward price pressure due to the price ceiling by taking all fresh bread off the market; all bread sold must be at least 1 day old. Would you expect this regulation to achieve the desired effect? Explain your answer?

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