In the absence of trade between the two countries,the price of rice in the U.S.in terms of radios would tend to be

A) 1/2.
B) 1/5.
C) 200.
D) 500.

Question

In the absence of trade between the two countries,the price of rice in the U.S.in terms of radios would tend to beA) 1/2.B) 1/5.C) 200.D) 500.

Haley Guertin · Accepted Answer

Final Answer : B, Explanation :  In the absence of trade, the opportunity cost of producing one radio in the United States is 5 units of rice (from possibility B, where 100 radios equate to 500 units of rice, thus 1 radio = 500/100 = 5 units of rice). Therefore, the price of rice in terms of radios in the U.S. would be the inverse, 1/5.

In the absence of trade between the two countries,the price of rice in the U.S.in terms of radios would tend to be

A) 1/2.
B) 1/5.
C) 200.
D) 500.

Definitions

Learning Objectives

Learning Objectives

Related questions