83.
Award: 1.00 point
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
Which state has an absolute advantage in producing beer in Case II?
South Dakota
North Dakota
Neither state
Both states
References
Multiple Choice Difficulty: 2 Medium
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
Which state has a comparative advantage in producing beer in Case I?
South Dakota
North Dakota
Neither state
Both states
To produce one additional unit of beer, it will cost South Dakota 4 bushels of wheat (4/1) and North Dakota 0.5 bushels of
wheat (1/2). Given 0.5<4, North Dakota has the comparative advantage in beer production.
References
Multiple Choice Difficulty: 2 Medium
84.
Award: 1.00 point
85.
Award: 1.00 point
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
Which state has a comparative advantage in wheat production in Case I?
South Dakota
North Dakota
Neither state
Both states
To produce one additional unit of wheat, it will cost South Dakota 0.25 bottles of beer (1/4) and North Dakota 2 bottles of
beer (2/1). Given 0.25<2, South Dakota has the comparative advantage in wheat production.
References
Multiple Choice Difficulty: 2 Medium
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
Which state has a comparative advantage in wheat production in Case II?
South Dakota
North Dakota
Neither state
Both states
To produce one additional unit of wheat, it will cost South Dakota 1.33 bottles of beer (4/3) and North Dakota 2 bottles of
beer (2/1). Given 1.33<2, South Dakota has the comparative advantage in wheat production.
References
Multiple Choice Difficulty: 2 Medium
86.
Award: 1.00 point
87.
Award: 1.00 point
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
What is the relative price of wheat in North Dakota prior to trade in Case II?
2 bushels of wheat = ½ bottle of beer
½ bushel of wheat = 2 bottles of beer
1 bushel of wheat = ½ bottle of beer
1 bushel of wheat = 2 bottles of beer
It costs North Dakota 2 bottles of beer to produce 1 additional unit of wheat, found by 2 bottles of beer/1 bushel of wheat.
References
Multiple Choice Difficulty: 2 Medium
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
For case II, in what range must the "international" price of wheat fall? ( i.e ., if North and South Dakota trade only with each
other, what is the possible range of prices?)
Between 1 bushel of wheat = 4/3 bottles of beer and 1 bushel of wheat = 2 bottles of beer
Between 1 bushel of wheat = 3/4 bottles of beer and 1 bushel of wheat = 2 bottles of beer
Between 1 bushel of wheat = 3/4 bottles of beer and 1 bushel of wheat = ½ bottles of beer
none of the options
References
Multiple Choice Difficulty: 2 Medium