MRU2.5: Comparative Advantage Homework

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In the no trade example, Mexico devotes half of its labor to computer production and half of its labor to shirt production. Mexico produces: - 1 computer and 6 shirts. - 14 computers and 10 shirts. - no computers and 12 shirts. - 12 computers and 12 shirts.

A: 1 computer and 6 shirts.

In the no tase example, total world production of computers is ______, of which _______ are produced in the United States. - 13; 0 - 13; 12 - 12; all 12 - 14; 12

A: 13; 12

What were the terms of trade between Mexico and the United States in the video? - 3 shirts for 1 computer - 3 shirts for 3 computers - 1/3 of a shirt for 1 computer - 1 shirt for 3 computers

A: 3 shirts for 1 computer

What role does absolute advantage play in analyzing trade? - It helps to explain countries' wealth. - It helps to explain which countries should produce which goods. - It helps to explain why countries should trade. - It helps to explain which individuals are helped or harmed by trade.

A: It helps to explain countries' wealth.

After trade, Mexico consumes 1 computer and 9 shirts. How many units of labor would it have taken Mexico to produce this outcome on its own, without trade? - It would take 30 units of labor, which is how much labor Mexico has. - It would take 10 units of labor, which is how much labor Mexico has. - It would take 10 units of labor, which is more labor than Mexico has. - It would take 30 units of labor, which is more labor than Mexico has.

A: It would take 30 units of labor, which is more labor than Mexico has.

If Mexico had demanded that the United States trade 1 computer to Mexico in exchange for 1 shirt, which of the following would be true? - The United States would not benefit from this trade. - The United States would benefit from this trade, but not as much as from the trade that occurs in the video. - The United States would be harmed by this trade. - The United States would benefit more from this trade than from the trade that occurs in the video.

A: The United States would not benefit from this trade.

After Mexico and the United States specialize according to comparative advantage, what happens to total world production of computers and shirts? - Total world production of both computers and shirts increases. - Total world production of computers, but not shirts, increases. - Total world production of shirts, but not computers, increases. - Total world production of both computers and shirts remains the same but the production is divided up differently.

A: Total world production of both computers and shirts increases.

After specialization and production, but before trade, Mexico has _______ than it did with no specialization, and the United States has _______ than it did with no specialization. - fewer computers; more shirts - more computers; more shirts - fewer computers; fewer shirts - more computers; fewer shirts

A: fewer computers; fewer shirts

After partially specializing according to comparative advantage, the United States produces 14 computers and 10 shirts because: - it has moved 4 units of labor from shirt production to computer production. - it has moved 2 units of labor from shirt production to computer production. - it has moved 2 units of labor from computer production to shirt production. - it has moved 4 units of labor from computer production to shirt production.

A: it has moved 2 units of labor from shirt production to computer production.

If Mexico specializes according to its comparative advantage, it will produce: - 14 computers and 10 shirts. - no computers and 12 shirts. - 12 computers and 12 shirts. - 1 computer and 6 shirts.

A: no computers and 12 shirts.


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