Table 2 Food ustralia Korea output per day of a typical worker in two countries,
ID: 1128719 • Letter: T
Question
Table 2 Food ustralia Korea output per day of a typical worker in two countries, Australia and Korea Workers can either 16) The table shows the output per their time to making food or making electronics mak the 16) Refer to Table 2. Which of the following statements is true? A) Australia has an absolute advantage in making both products B) making electronics. electronics and Korea in making food. Korea has an absolute advantage in making both products Australia has an absolute advantage in making food and Korea in D) Australia has an absolute advantage in making 17) Refer to Table 2. Which of the following statements is true? A) Australia has a comparative advantage in making both products and Korea in making food. B) Australia has a comparative advantage in making electronics C) Korea has a comparative advantage in making both products a comparative advantage in making electronics and Australia in making food 18) A movement along the demand curve for toothpaste would be caused by A) a change in consumer income. C) a change in the price of toothbrushes. B) a change in the price of toothpaste. D) a change in population. 19) If consumers' incomes increase and the demand for bus rides decreases, then 19 A) bus rides are an inferior good. C) consumers are behaving irrationally. B) bus rides are a normal good D) bus rides are elastic 20) Ranchers can raise either cattle or sheep on their land. Which of the following would cause the 20) supply of sheep to increase? A) an increase in the demand for cattle C) a decrease in the price of cattle B) an increase in the price of sheep feed D) an increase in the price of sheep 21) The law of diminishing marginal returns A) explains why the average total cost, average fixed cost, and the marginal cost curves are U-shaped in the short run. B) causes the difference between average total cost and average variable cost to get smaller as output increases. C) causes average total costs to rise at a decreasing rate as output increases D) explains why the average total cost and marginal cost curves are U-shaped in the short run. 22) If another worker adds 9 units of output to a group of workers who had an average product of 7 22) units, then the average product of labor A) will increase. B) will remain the same. C) will decrease. D) it is unclear what will happen as it cannot be determined from the information given.Explanation / Answer
16. Absolute advantage is possessed bya country if it is more capable of producing a good more efficiently than the other country. It can be seen that a worker in Australia can produce 10 units of food while a worker in Korea can produce only 8 units of food. Therefore, Australia has an absolute advantage in producing food.
Also, a worker in Australia can produce 5 units of electronics while a worker in Korea can produce only 2 units of electronics.
Thus, the correct answer is option (A) Australia has an absolute advantage in making both products.
17. In order to check comparative advantage, opportunity costs of producing each good in both the countries is evaluated.
In Australia,
OC of food = 5/10 = 0.5 Electronics
OC of Electronics = 10/5 = 2 Food
In Korea,
OC of food = 2/8 = 0.25 Electronics
OC of Electronics = 8/2 = 4 Food
Since Korea can produce food at a lower OC than Australia (0.25 < 0.5), Korea has a comparative advantage in production of food.
While Australia has a lower OC in producing electronics than Korea (2 < 4), Australia has a comparative advantage in producing electronics.
Therefore, the correct answer is option (B) Australia has a comparative advantage in making electronics and Korea in making food.
18. Any movement along a demand curve is caused by a change in the price of the commodity.
Therefore, the correct answer is option (B) change in the price of toothpaste.
19. If the money income of the consumer increases, and the demand for a good increases. The good is a normal good. While, if the income of the consumer increases and the demand for the good declines, the good is an inferior good.
Therefore, the correct answer is option (A) bus rides are an inferior good.
Note: One cannot ask multiple questions at one time. Kindly post the other questions separately. I have answered the first four, hope it helps!
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