18. for a country to have a comparative advantage in a good, it must have a. more capital to produce that…

18. for a country to have a comparative advantage in a good, it must have a. more capital to produce that good. b. more labor to produce that good. c a lower opportunity cost of producing that good. d. an ability to produce more of that good than another country has. 19. suppose that costa rica is able to produce 50,000 pounds of coffee or 10,000 medical devices per day; vietnam is able to produce 40,000 pounds of coffee or 5,000 medical devices per day. which statement is true? a. costa rica has a comparative advantage in the production of medical devices, while vietnam has a comparative advantage in coffee production. b. costa rica has a comparative advantage in coffee production, while vietnam has a comparative advantage in the production of medical devices. c. costa rica has a comparative advantage in the production of both coffee and medical devices. d. costa rica has an absolute advantage in medical device production, while vietnam has an absolute advantage in coffee production. 20. using the productivity rates for spain and portugal, which statement is true? country oranges (per worker per day) olives (per worker per day) spain 500 250 portugal 400 100 a. spain has a comparative advantage in olives. b. portugal has a comparative advantage in olives. c. both spain and portugal have a comparative advantage in olives. d. both portugal and spain have a comparative advantage in oranges. 21. which situation would result in a change in the quantity demanded (as opposed to a change in demand) for beanbag chairs? a. a decrease in the price of video game consoles, a complement to beanbag chairs b. an increase in popularity of beanbag chairs c. a decrease in the price of beanbag chairs

18. for a country to have a comparative advantage in a good, it must have a. more capital to produce that good. b. more labor to produce that good. c a lower opportunity cost of producing that good. d. an ability to produce more of that good than another country has. 19. suppose that costa rica is able to produce 50,000 pounds of coffee or 10,000 medical devices per day; vietnam is able to produce 40,000 pounds of coffee or 5,000 medical devices per day. which statement is true? a. costa rica has a comparative advantage in the production of medical devices, while vietnam has a comparative advantage in coffee production. b. costa rica has a comparative advantage in coffee production, while vietnam has a comparative advantage in the production of medical devices. c. costa rica has a comparative advantage in the production of both coffee and medical devices. d. costa rica has an absolute advantage in medical device production, while vietnam has an absolute advantage in coffee production. 20. using the productivity rates for spain and portugal, which statement is true? country oranges (per worker per day) olives (per worker per day) spain 500 250 portugal 400 100 a. spain has a comparative advantage in olives. b. portugal has a comparative advantage in olives. c. both spain and portugal have a comparative advantage in olives. d. both portugal and spain have a comparative advantage in oranges. 21. which situation would result in a change in the quantity demanded (as opposed to a change in demand) for beanbag chairs? a. a decrease in the price of video game consoles, a complement to beanbag chairs b. an increase in popularity of beanbag chairs c. a decrease in the price of beanbag chairs

Answer

Brief Explanations:

  1. Comparative - advantage is defined by lower opportunity - cost. A country with a lower opportunity cost of producing a good has a comparative advantage in that good.
  2. For Costa Rica, the opportunity cost of 1 medical device is 5 pounds of coffee (50,000/10,000). For Vietnam, the opportunity cost of 1 medical device is 8 pounds of coffee (40,000/5,000). Costa Rica has a lower opportunity cost in coffee production (1 pound of coffee costs 0.2 medical devices), and Vietnam has a lower opportunity cost in medical - device production (1 medical device costs 8 pounds of coffee).
  3. For Spain, the opportunity cost of 1 orange is 0.5 olives (250/500), and for 1 olive is 2 oranges (500/250). For Portugal, the opportunity cost of 1 orange is 0.25 olives (100/400), and for 1 olive is 4 oranges (400/100). Portugal has a lower opportunity cost in olive production.
  4. A change in the quantity demanded is caused by a change in the price of the good itself. A change in demand is caused by non - price factors.

Answer:

  1. C. a lower opportunity cost of producing that good.
  2. B. Costa Rica has a comparative advantage in coffee production, while Vietnam has a comparative advantage in the production of medical devices.
  3. B. Portugal has a comparative advantage in olives.
  4. C. a decrease in the price of beanbag chairs