Chapter 1. Basic Principles and Economic Models
1.1
Econ Tutorial
As you progress through the tutorial, the question sequences will become available. You must complete all the question sequences to receive credit for this tutorial.
Tutorial
Questions
6
18
Question
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Great job! Country A can produce at maximum EITHER 5 tons of Diapers OR 10 cases of Baby Food. This means that the ratio of Diapers: Baby Food is 10: 5 or 2:1.
Country A can produce at maximum EITHER 5 tons of Diapers OR 10 cases of Baby Food. This means that the ratio of Diapers: Baby Food is 10: 5 or 2:1.
Question
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Great job! Country B can produce at maximum EITHER 4 tons of Diapers OR 4 cases of Baby Food. This means that the ratio of Diapers: Baby Food is 4: 4 or 1:1.
Country B can produce at maximum EITHER 4 tons of Diapers OR 4 cases of Baby Food. This means that the ratio of Diapers: Baby Food is 4: 4 or 1:1.
Question
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Great job! Country A can produce a ton of diapers at a "cost" of 2 cases of baby food; for Country B the same ton of diapers "costs" only 1 case of baby food. Since Country B has the lower opportunity cost for producing diapers, it possesses the "Comparative Advantage" in diapers. Conversely, the cost for producing baby food is lower in Country A (1/2 ton of diapers) than for Country B (1 ton of diapers) so Country A possesses the "Comparative Advantage" in baby food.
Incorrect. Country A can produce a ton of diapers at a "cost" of 2 cases of baby food; for Country B the same ton of diapers "costs" only 1 case of baby food. Since Country B has the lower opportunity cost for producing diapers, it possesses the "Comparative Advantage" in diapers. Conversely, the cost for producing baby food is lower in Country A (1/2 ton of diapers) than for Country B (1 ton of diapers) so Country A possesses the "Comparative Advantage" in baby food.
Question
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2
Great job! Country A can produce MORE diapers (5) than Country B (4) so Country A has the "Absolute Advantage" in diaper production. Likewise, Country A can produce MORE baby food (10) than Country B (4) so Country A also has the "Absolute Advantage" in baby food production.
Incorrect. Country A can produce MORE diapers (5) than Country B (4) so Country A has the "Absolute Advantage" in diaper production. Likewise, Country A can produce MORE baby food (10) than Country B (4) so Country A also has the "Absolute Advantage" in baby food production.