Question : 41) Assume that Australia has a comparative advantage in producing : 1244906

41) Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia. We can conclude that

A) Australia also has an absolute advantage in producing surfboards relative to New Zealand.

B) Australia has a lower opportunity cost of producing surfboards relative to New Zealand.

C) New Zealand has an absolute disadvantage in producing surfboards relative to Australia.

D) Labor costs are higher for surfboard producers in New Zealand than in Australia.

42) Whenever a buyer and a seller agree to trade, both must believe they will be made better off

A) unless the buyer resides in a different country than the seller resides in. International trade may make the buyer or seller worse off.

B) unless one party is richer than the other.

C) only if the buyer and seller live in countries with market economies.

D) whether the buyer and seller live in the same city or different countries.

43) If Norwegian workers are more productive than Albanian workers, then trade between Norway and Albania

A) cannot take place because Norwegian goods and services will be less expensive than Albanian goods and services.

B) will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want.

C) cannot take place until Albanian workers become more productive.

D) can take place only if Albania has an absolute advantage in producing a good or service Norwegian buyers want.

44) If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

A) marginal

B) explicit

C) opportunity

D) implicit

45) If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then

A) the average cost of production for sugar cane is lower in Brazil than in Cuba.

B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba.

C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.

D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.

46) If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the following would explain this pattern of trade?

A) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter.

B) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of producing butter in Sweden.

C) Sweden must have an absolute advantage in producing cell phones and Denmark must have an absolute advantage in producing butter.

D) Sweden has a higher opportunity cost of producing cell phones than Denmark, and Denmark has a higher opportunity cost of producing butter.

47) The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

48) If a country has an absolute advantage in producing a product, it must also have a comparative advantage in producing that product.

49) If a country has a comparative advantage in producing a product, it may not have an absolute advantage in producing that product.

50) If Estonia has an absolute advantage in the production of two goods compared to Norway, Estonia can not benefit from trade with Norway.