pounds of butter to produce one additional gun, and therefore, because 3 > 2, South Carolina has the comparative
advantage in making guns.
References
Multiple Choice Difficulty: 2 Medium
102.
Award: 1.00 point
Consider the no-trade input/output situation presented in the following table and graph for South and North Carolina.
Assume that free trade is legal.
Input/Output without Trade
Country
South Carolina North Carolina Total
I. Total Potential Output
(lbs. or yards; 000,000s)
Guns 500 250 750
Butter 1,000 750 1,750
II. Consumption
(lbs. or yards; 000,000s)
Guns 250 200 450
Butter 500 150 650
How much does it cost for North Carolina to produce one gun?
3 pounds of butter
.33 pounds of butter
1.33 pounds of butter
none of the options
It costs NC 3 (750/250) pounds of butter to produce one gun.
References
Multiple Choice Difficulty: 2 Medium
103.
Award: 1.00 point
Consider the no-trade input/output situation presented in the following table and graph for South and North Carolina.
Assume that free trade is legal.
Input/Output without Trade
Country
South Carolina North Carolina Total
I. Total Potential Output
(lbs. or yards; 000,000s)
Guns 500 250 750
Butter 1,000 750 1,750
II. Consumption
(lbs. or yards; 000,000s)
Guns 250 200 450
Butter 500 150 650
What is the relative price of a gun in terms of butter in South Carolina?
1 gun costs 3 pounds of butter.
3 guns cost 1 pounds of butter.
1 gun costs 2 pounds of butter.
2 guns cost 1 pounds of butter.
It costs 2 (1,000/500) pounds of butter to produce one gun in South Carolina.
References
Multiple Choice Difficulty: 2 Medium
104.
Award: 1.00 point
Consider the no-trade input/output situation presented in the following table and graph for South and North Carolina.
Assume that free trade is legal.
Input/Output without Trade
Country
South Carolina North Carolina Total
I. Total Potential Output
(lbs. or yards; 000,000s)
Guns 500 250 750
Butter 1,000 750 1,750
II. Consumption
(lbs. or yards; 000,000s)
Guns 250 200 450
Butter 500 150 650
What is the relative price of a pound of butter in terms of guns in North Carolina?
1 pound of butter costs 0.33 guns.
1 gun costs 0.33 pounds of butter.
1 pound of butter costs 0.66 guns.
2 guns costs 0.66 pounds of butter.
In North Carolina, it costs 0.33 (250/750) guns to produce one pound of butter.
References
Multiple Choice Difficulty: 2 Medium