1. Business
  2. Economics
  3. answer questions 3 through 6 based on the following information...

Question: answer questions 3 through 6 based on the following information...

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Answer questions 3 through 6 based on the following information: There are two and Foreign, in a hypothetical world. Each of these two countries are Ricardian economies. Each country is endowed with 100 labor hours. Each country and car. The following table shows labor requirements per unit of each good in each country. Perfect competition prevails everywhere in the two-country world. Suppose that w and wrepresent Homes and Foreigns hourly wage rates, respectively. countries, Home can use labor to produce two goods, cheese Product Home Car (Y) Table 1: Labor hours per unit of outputs Foreign Cheese (X) Lx-2 LX aty 0.5 aLY = 2
3. The marginal cost of cheese isIn Home A) B) 2u C) 0.3r D) 4w 4. The marginal cost of cheese , in Foreign. A) t B) 2t C) 0.5 D) 4 5. The marginal cost of car isin Home. A) u B) 2w C) O.5 D) 4w 6. The marginal cost of car is in Foreign. A) B) 2w C) 0.5u D) 4w 7. What is the opportunity cost of producing one unit of cheese in Home? A) 1 car B) 2u C) 2 cars D) w 8. What is the opportunity cost of producing one unit of cheese in Foreign? A) 1 car B) 2u C) 2 cars D) w
9 9, which of the following statements is correct? A) Home is more technologically advanced than Foreign in each in B) Home is more technologically advanced than Foreign in the car industry C) Foreign commands absolute advantage over Home in each industry D) Foreign commands absolute advantage over Home only in the car 10. Which of the following statements is correct? A) Foreign is more cost effective than Home in producing both cheese and car. B) Home is more cost effective than Foreign in producing both cheese and car. C) Home is more comparatively advantaged than Foreign in producing cheese. D) Home has no comparative advantage over Foreign in each industry 11. Home and Foreign are in autarky. If you lived in Home, how much would you need to pay for a car (good Y)? A) 0.25x B) 0.5x C) 1x D) none of the above 12. Home and Foreign are in autarky. If you lived in Foreign, how much would you need to pay for a car (good Y)? A) 0.25x B) 0.5x C) 1x D) none of the above
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