Asked by
Hannah Overton
on Oct 12, 2024
Verified
Suppose California and Wisconsin produce wine and cheese.Making a bottle of wine costs $3 in California,but $12 in Wisconsin.On the other hand,making a pound of cheese costs $4 in California,and $8 in Wisconsin.Under these conditions,
A) California should export wine and Wisconsin should export cheese.
B) California should export cheese and Wisconsin should export wine.
C) California should export both wine and cheese.
D) the two states cannot gain from trade with each other until a third state starts to export bottle openers.
Opportunity Cost
The potential benefits an individual, investor, or business misses out on when choosing one alternative over another.
Export
A good or service produced in one country and sold to buyers in another country, contributing to the selling country's gross domestic product.
Cheese
A dairy product derived from milk and produced in a wide range of flavors, textures, and forms by coagulating the milk protein casein.
- Detail the distinctions between comparative and absolute advantage in the trading sector.
- Comprehend the benchmarks for participation in global commerce rooted in the principle of comparative advantage.
Verified Answer
NT
Learning Objectives
- Detail the distinctions between comparative and absolute advantage in the trading sector.
- Comprehend the benchmarks for participation in global commerce rooted in the principle of comparative advantage.