What distinguishes comparative advantage from absolute advantage in production?(1 point)

Question

Responses

A country has comparative advantage in production when it requires fewer total inputs than does another country to produce the same output.
A country has comparative advantage in production when it requires fewer total inputs than does another country to produce the same output.

A country has comparative advantage in production when its opportunity costs of producing a good are higher than another country's.
A country has comparative advantage in production when its opportunity costs of producing a good are higher than another country's.

A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.
A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.

A country has comparative advantage in production when it requires more total inputs than does another country to produce the same output.

Answer 1

The correct response is:

A country has comparative advantage in production when its opportunity costs of producing a good are lower than another country's.

Comparative advantage focuses on the relative opportunity costs of producing goods, while absolute advantage refers to the ability of a country to produce more of a good with the same amount of resources than another country.

Answer 2

If both Japan and the United States directed all of their resources to the production of laptops, the United States would produce a greater quantity laptops in any period of time. Given this information, which of the following is necessarily true?(1 point)
Responses

The United States has a comparative advantage in laptop production.
The United States has a comparative advantage in laptop production.

Japan has a comparative advantage in laptop production.
Japan has a comparative advantage in laptop production.

Japan has an absolute advantage in laptop production.
Japan has an absolute advantage in laptop production.

The United States has an absolute advantage in laptop production.

Answer 3

The correct response is:

The United States has an absolute advantage in laptop production.

This is because the United States can produce a greater quantity of laptops compared to Japan using the same amount of resources. However, we cannot conclude anything about comparative advantage without knowing the opportunity costs related to laptop production in both countries.

Answer 4

At most, a country could produce 20,000 units of Good A or 5,000 units of Good B. What is the opportunity cost of producing one unit of Good B in terms Good A?(1 point)
Responses

4 units of Good B
4 units of Good B

14 unit of Good B
1 fourth unit of Good B

14 unit of Good A
1 fourth unit of Good A

4 units of Good A

Answer 5

To find the opportunity cost of producing one unit of Good B in terms of Good A, we can use the following calculation:

1. If a country can produce 20,000 units of Good A or 5,000 units of Good B, the total opportunity cost of producing all units of Good B (5,000 units) is the number of Good A units that would be foregone.

2. For every unit of Good B produced, the country forgoes production of some amount of Good A. The total amount of Good A foregone for producing 5,000 units of Good B is 20,000 units.

3. The opportunity cost of producing 1 unit of Good B is therefore calculated as follows:

   \[ \text{Opportunity cost of 1 unit of Good B} = \frac{\text{Total units of Good A foregone}}{\text{Total units of Good B produced}} = \frac{20,000 \text{ units of Good A}}{5,000 \text{ units of Good B}} = 4 \text{ units of Good A} \]

So, the opportunity cost of producing one unit of Good B in terms of Good A is:

4 units of Good A.