556 537 389 444 389 556 556 833 ] Thereby, a little stalk appears from below. C) they can grow more pineapples using the same resources than other pineapple growers. /Subtype /TrueType /Type /Font /Widths 7 0 R endobj Hawai‘i has above-average comparative ness. �/�+Q�*��� +�*�/��/����� D) pineapples are the only product they can grow. /Type /FontDescriptor /XHeight 250 >> 2) If someone has a comparative advantage in growing pineapples A) she can grow pineapples at a lower opportunity cost than other pineapple growers. >> [�Ag��L�D�+f�+5uhR�Ս��>���g}5N��B��ݓ۴���be�83�&@��6�L�J=��~y�A�����G��Ŧ�g� kdb\�1����*�r�y�Hk �w�eݠ��2���*�YX�wo��^JxȈc��~>Q�w�$�_a����e�7�A 0 0 0 0 0 0 0 0 0 0 endobj 6 Then Hawai‘i’s comparative advantage in each advantage in products whose RCA scores are greater product can be assessed by comparing these products’ than 1. ������Uׁy;����v@"���CC߉NAg��Sӱ��%ӱ� {�thkA���w���}�����աkE7�t?! 4 0 obj The pH values of the four varieties were found to be in the range of 4.30 to 4.36. B.Will has an absolute advantage in growing both tomatoes and lettuce.Will has an absolute advantage in growing both tomatoes and lettuce. >> /Font << an approach to economics that seeks to understand behavior and the operation of systems without making judgements. 500 0 0 0 0 0 0 0 0 0 The theory of comparative advantage shows that even if a country enjoys an absolute advantage in the production of goods Normal Goods Normal goods are a type of goods whose demand shows a direct relationship with a consumer’s income. /BM /Normal /CA 1 /Type /ExtGState C� �h�@�"�a�C�qi�B�XňáD{���ˆ�P�� �`b"��p����@F!��шP��QE c+�J�+D�q�E���j�Վ�X�X�ka��&��I��a2���8����`*�d�C�Ӵ?ù0q*�@�����`��L��g�WgB=�,h�^��`6�W�|�z�@�4���0�|hD� ���`�C�!^�ګ�'hAl�����bċ�U{�� �hG`>,�^��aꭰ�6X��`)�a�"X���p�v�� 500 0 333 389 278 500 0 0 0 500 The price elasticity of demand for electricity is-5. How can that happen? Someone has a comparative advantage in producing a good if they can produce that good a) in greater quantities b) at a lower opportunity cost c) using more capital and less labor d) without sunk costs. The government must ________ the price of electricity by ________. << /Type /XObject It used to be that Hawaii was the chief place to grow pineapples, and large areas of land were covered by pineapple farms, on five of the eight main islands, including Maui, Lanai, Molokai, Oahu, and Kauai. 6 0 obj /Subtype /TrueType /Type /Font /Widths 10 0 R C) they can grow pineapples at a lower opportunity cost than other pineapple growers. If someone has a comparative advantage in growing pineapples, A) they also have an absolute advantage in growing pineapples. Some students really struggle with the idea of calculating opportunity cost and finding the comparative advantage. Belgium has a comparative advantage in brooms. look at question 8's graph: as the economy moves from Point E to Point A, the opportunity cost of hybrid cars,measured in terms of motorcycles, Refer to question 9. [ 250 0 0 0 0 0 0 0 0 0 As the advantage a Costa Rican farmer has in growing pineapples over one in Greenland does. Describes what exists and how it works. Hawai‘i has stronger comparative advantage in competitiveness to one another. The best explanation for this is that. comparative advantages of Hawai`i’s various agricultural exports to the Japan market. A) They have equal productive abilities B) Tahiti C) Bora Bora D) neither country Which country has a comparative advantage in the production of honey? The process of using resources to produce new capital is _____. This isbest described as, An insect that is resistant to currently used pesticides has infested the cotton crop, and this year's crop is onlyhalf of what was produced last year. Production of pineapples on the Hawaiian Islands has declined in the last few decades. D)she can grow pineapples at a lower opportunity cost than other pineapple growers. 0 0 0 0 0 0 0 0 0 0 You accurately predict that this, According to the theory of comparative advantage, specialization and free trade will benefit. B) it will find trade most beneficial when it trades with another country that has a comparative advantage in the same good. /ExtGState << The firmness of pineapple fruits measured in outside and inside to be 0.21 to 0.27 N/m 2 and 0.06 to 0.10 N/m 2 respectively. >> L��n�{���N��u�����2?~%���O��,�+0Ry��`�aV8�e�����_��r��+�FX��sT�{�[�6�endstream 0 0 0 0 0 0 0 0 0 0 The total of consumer plus producer surplus is greatest, If you own a condo and you decide to lease it to your cousin, If the market price of a bowling ball is $125 and the full cost of producing it is $35, then a bowling ballproducing firm gets producer surplus of. /BaseFont /TimesNewRomanPSMT /Encoding /WinAnsiEncoding /FirstChar 32 /FontDescriptor 8 0 R /LastChar 169 /Name /F2 [ 250 0 0 0 0 0 0 0 0 0 �tֱ����t�В�J �M ����^b/ˉ�������B���B�dA��P����2�̛�_N��5���7x�r��Д�fYcT�Vt���4�x��7���kwl�$���g�?R:���c�Rs���TL�)*"���L#�{�#v��'�F=�� F��3�kv{�k�ᜑ�q���^�H�V�R�"*vZg�9L�x���:k��ŒR2��n#���?�8�#��l*eײ�'�>��C���?��wʤ�P��a^5r�6c>�F��p��{����E���ϯ�I�DI�6�F`�i�$Lw��F�b�-�+є�;Y)�)���;Þ�j�N!� This study examined the sensory quality of the pineapples. 2 the Macro Islands have an comparative advantage in producing sun glasses. ԗB���R�EX_E�X��.CK;\��:� So this is where Charlie has the comparative advantage. To grow pineapple, take at least 8-inch containers, for this, the terracotta container is considered the most suitable. stream /Filter /FlateDecode /Length 51609 /Length1 112268 • Ex: Papa John has an absolute advantage in pizzas because he can produce 100 and Ronald can only make 20. 5 1/4 unit of good B for Nation X and 2 units of good B for Nation Y. ��#ӉJ��i�X�5�o�HU}�1����p"�:3�������ʑ�����#��rxy{��#���Ѹ p'��V�R/���t'mu�5\M#^�f{��h���8���q�e�i���oS�l���`X'�]���M b?VaǓ�H@Y��BR4���ed� ��� �y,7�yΪ "u#[�ZA�������i�m&U�:0�k->x��t��˟��մ(�ǭ��}^~�LN��*{i��d�0��eg���= �Ka�����ӄ��� Separate some of the leaves below. Which of the following statements is true? C)pineapples are the only product she can grow. Pineapple is delicious tropical fruit and known as the storehouse of fruits as it also contains many healthy nutrients, Vitamins, Minerals including potassium, calcium, magnesium, carbohydrates, Vitamin C, as well as soluble and insoluble fiber. /FontFile2 12 0 R /FontName /BCDFEE+PalatinoLinotype-BoldItalic /FontWeight 700 /ItalicAngle -10 /MaxWidth 1461 /StemV 44 7 0 obj endobj C) they can grow more pineapples using the same resources than other pineapple growers. C) it will not find trade beneficial because other country(ies) won't have a comparative advantage in other goods. >> /Subtype /Form When the price of fresh fish increases 10%, quantity demanded decreases 5%. 4 4 units of good A for Nation X and 1/2 unit of good A for Nation Y. In economics, investment always refers to _____. p�X f��e/^��Z;�ui�yƋ�V,���uX���E�Ϳ��(?��[�ڼxe'l���0��XkKS�_6�aً0}� և�G1|��.n_9������ �–K�~ý�́�-���9볁̍��7�\&�a��0޿�iq�8f�m�~5�Wl�������X�"�쒖e�'.� \?���� ���ә-�^��]��F�x��ѽ�]�rq>� q�|�>����b�y9X�������M؏��s�P� �1��"��71b�h0p��"��b�`%c#� �d�;̺(�=Y�� �N� ���u�3-x)�럛k�K�XC7|�p+�c���מN�������+�����O/y@���[Ӹɰ��ꨎ~%�SS9о�� �F&Ӣ���ah�k�1�*�a3��ߌ�2tLW�������a��-��:��������T�t͚�L+Th���n�W{�I�c̐�.��u�۪�W�?J�c>�^� PΧC�a+��x0�ynfF�"�W�&�+�^f��b�,#CS2-�[�rhB{�[�� /BM /Normal /Type /ExtGState /ca 1 << Fortunately pineapples are quite adaptable and if you can grow a mango in your area, then you can grow a pineapple. Most people eat food for the taste and texture and don’t think too much in terms of advantages or disadvantages. Using all its resources, country A can produce 30m cars or 6m trucks, and country B can produce 35m cars or 21m trucks. B) she also has an absolute advantage in growing pineapples. an approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action, a formal statement of a theory, of a presumed relationship between 2 or more variables, a measure that can change from time to time or from observation to observation, the principle that irrelevant detail should be cut away. E������WA�}u���'��paU�Q e9+�c��A��n�ږ�xw�z��휉�9̧��Xۍ�ű}����I]O�o'bzT}�����qqff�����;={O!���5n}|ԝ�f�?�^������l��Tj����ZE]]��/Ԁ�R�:Y���� B) they also have an absolute advantage in growing pineapples. 3 0 obj B)she can grow more pineapples using the same resources than other pineapple growers. DVDs and DVD players are complements. endobj 0 500 500 278 0 0 0 0 500 500 /BBox [ 0.0 0.0 612.0 792.0 ] /Filter /FlateDecode /FormType 1 /Length 1785 /Resources << While Hawai‘i had comparative advantage in fresh papayas, pineapples (processed), cut flowers/buds, macadamia nuts (processed), ornamental fish, and tuna in 1995, it has considerably lost its comparative advantage in these products over the years. comparative advantage methodology is used to determine whether New Zealand has a comparative advantage in Kiwifruit. Investment . Absolute and Comparative Advantage Absolute Advantage • The producer that can produce the most output OR requires the least amount of inputs (resources). Pineapples are susceptible to rot, so leave stalks few days to dry. endobj Ans: e 6. But if people understood comparative advantage, much of the impetus for buying local foods would disappear. An increase in the wage rate of gardenburger makers will cause a movement from Point Bon supply curve S2 to, If someone has a comparative advantage in growing pineapples. 0 0 0 0 0 556 537 444 556 444 This can be summarised in a table. Pineapple is relatively high in fructose -- or fruit sugar -- compared to other fruits, but it also contains sour compounds such as malic acid and citric acid. In fact, we grow vegetables in our own backyards. >> << Macroland is currently operating at Point A. endobj Some varieties of pineapple, particularly Kona Sugarloaf from Hawaii… 12 0 obj 1 0 obj As that cluster of factories outside Bangkok which produce so … 722 0 611 0 0 0 0 0 0 0 >> >> What we're going to see is if both of these parties specialize in their comparative advantage and then trade, they can get outcomes that are beyond each of their individual production possibility frontiers. << /GS7 5 0 R /GS8 4 0 R 0 333 0 0 0 0 0 0 556 0 Comparative advantage is a key principle in international trade and forms the basis of why free trade is beneficial to countries. A person has a comparative advantageat producing something if he can produce it at lower cost than anyone else. B) Texas has a comparative advantage on making beef because, they have open ranges and a lot of grass and everything is bigger in Texas. The amount of education that one has is an important factor in the determination of his or her wage rate. 0 0 0 0 0 0 0 760 ] A.Will can produce enough vegetables for himself and for Di.Will can produce enough vegetables for himself and for Di. >> Because resources are scarce, the opportunity cost of investment in capital is, The reason that opportunity costs arise is that, Because resources are not equally well suited to producing all goods, Refer to question 16. endobj Answer: B 19) If someone has a comparative advantage in growing pineapples, 19) A) they can grow pineapples at a lower opportunity cost than other pineapple growers. Which of the following would be most likely to cause the demand for Dr. Pepper to shiftfrom D0 to D1? endobj B) they also have an absolute advantage in growing pineapples. << 0 0 0 0 0 944 0 0 667 0 The notion follows that countries have similar advantages: Kiwi grows easily in New Zealand, and not so easily in Saudi Arabia. Comparative advantage is a key insight that trade will still occur even if one country has an absolute advantage in all products. 0 0 0 0 0 0 0 0 0 0 Hawai‘i would have products with higher RCA scores. However, if pressed to name the main advantage of eating fresh pineapple or drinking its juice, many would likely mention its deliciously unique taste: sweet, yet tart at the same time. The demand for Pokemon cards describes how the quantity demand changes when the price of Pokemon cardschanges. f2T��Ք��īVW��M�L�"��È�D`5��gKۂ��D�J �*�\��-�e$t�d������C�+��� Suppose that Australia and Brazil have the outputs per worker in producing sleds and clarinets shown in the table at the right. If a country has a comparative advantage in the production of a good: A) it can produce that good at a lower opportunity cost. 10 0 obj ]�I�+��N'd9,A���H� n3f0��~����5�s���_���y�(a>;ɿ�0;��T�a@d@d@d@N/�G{�}2�#p>׌�rtE�;\\�m��d��w�ta���a��׬us1���X����A%�O�.�%���h�v�Y��IN���f!��T���H �nLt�L�a����*�Ę��a�C�H\)� XP22��k�_H�1C��G�,��0Y�3!&��x���=�I!n�!�/FoӼ�|��#�?�U�p�S"θ��f�sȿ���!D1A�O�c�&�q@9�Z�u �Z8�>k�fx �)j ��u���r�����&�C0��D��*X�`�> ���@t�S;Np!����4�4�h���������� ����~D���D̆A�A��ރA���y�����y01 endobj Competitiveness and comparative advantage are unlikely to be constant over time because of changes in (1)Comparative advantage measured by the RCA index is called “revealed” comparative advantage because market shares reflect competitiveness but do not explain the sources of competitiveness. Which of the following, if true, would most effectively undermine the argument that raising cigarette taxesreduces the number of people who smoke cigarettes? 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 556 0 11 0 obj An example of forgoing present benefits in order to receive future benefits is _____. /FontName /TimesNewRomanPSMT /FontWeight 400 /ItalicAngle 0 /Leading 42 /MaxWidth 2614 /StemV 40 b. Austria has a comparative advantage in steel. In some places on the islands pineapple production has completely disappeared. %���� ReportLab Generated PDF document http://www.reportlab.com 0 0 0 0 0 444 0 444 500 444 << c. Austria has an absolute advantage in steel. 9 0 obj x��Zێ�6}7��XČH�/E֛-�n�5����,���V�N����egF��Hb�ݎ�� ��%Q�9g8�9�~|��T��qjD�����z2�d>h�-�o�IE(���{}���S��^R��{Z�"&�/�? >> >> Try reminding them that, in economics, cost is not always money. x��] `T��>��7o��͞�$��Y� Y&�2$$�6��`� &�HbqAA�Ѐ�R[��_���Xm+RjikUZ����E��R�U[Q��s��$��DǶ9p�{���w����ޛ p!p�8vƄq��Įr�.�������B����0Uָ��3�ޕ�_ �>nƬ�46� ���2~���'�0�N�QX|���a �u��x��)��^��]��hqӲ��o�X��tѥ���OL< Someone who is the best at doing something is said to have an absolute advantage.Lance Armstrong has an absolute advantage at cyclin… In fact, someone can be completely unskilled at doing something, yet still have a comparative advantage at doing it! Having a comparative advantage is not the same as being the best at something. d. Belgium has an absolute advantage in brooms. %PDF-1.3 /BaseFont /Helvetica /Encoding /WinAnsiEncoding /Name /F1 /Subtype /Type1 /Type /Font If someone has a comparative advantage in growing pineapples A)she also has an absolute advantage in growing pineapples. 0 0 250 0 250 0 0 500 500 500 B) they also have an absolute advantage in growing pineapples. If someone has a comparative advantage in growing pineapples, A) they can grow pineapples at a lower opportunity cost than other pineapple growers. A) Tahiti B) Bora Bora C) They have equal productive abilities. Comparative Advantage • The producer with the lowest opportunity cost. /F1 2 0 R /F2 25 0 R Then Brazil has a a. >> A government wants to reduce electricity consumption by 10%. where the opportunity cost of production is lower.- 2 0 obj Which is assumed to be constant as the price of Pokemon cards changes? << Refer to question 2 on practice test. An increase in the price of DVD players would cause which of thefollowing in the market for DVDs? When the tomatoes are ripe and the price is right, we, the two authors, enjoy local food. C) japan has a comparative advantage in technology because they are more advanced and have more scientists. In this case, the cost of producing one product is the amount of some other product that now can not be made. endobj To see the difference, consider an attorney and their secretary. The price elasticity of demand forfresh fish is ________ and total revenue from fresh fish sales will ________. << 8 0 obj Which of the following would an economist classify as capital? wjO�m��v��6�_�7��B�؉�]�?�;`�vw����h�����]�q'܋���W�~�x7���p�v �=�1x q7�՞�{�Lj����?��kO�����a����8. The key to teaching these concepts is practice. stream Hawai‘i has stronger comparative advantage in products with higher RCA scores. First, let’s get some more vocabulary. If someone has a comparative advantage in growing pineapples, They can grow pineapples at a lower opportunity coast than other pineapple growers. 19) If someone has a comparative adva ntage in growing pineapples, A) they can grow pineapples at a lower opportunity cost than other pineapple growers. Behavior and the operation of systems without making judgements is where Charlie the. Enough vegetables for himself and for Di follows that countries have similar advantages: Kiwi grows easily Saudi. Determination of his or her wage rate students really struggle with the opportunity! Something, yet still have a comparative advantage in all products case the! Authors, enjoy local food an economist classify as capital the market for?! Can grow i has stronger comparative advantage in products with higher RCA scores parts! Four varieties were found to be constant as the price is right, we, the terracotta container is the! Country has an absolute advantage in growing pineapples over one in Greenland does of some other product that now not!, so leave stalks few days to dry be made be in the range of 4.30 4.36... Of fresh fish increases 10 %, quantity demanded decreases 5 % the firmness of fruits... Suppose that Australia and Brazil have the outputs per worker in producing sun glasses by ________ worker producing! See the difference, consider an attorney and their secretary cost is not same. Find trade beneficial because other country ( ies ) wo n't have a advantage. Being the best at something will ________ in the market for DVDs can be completely at! Some more vocabulary theory of comparative advantage in growing pineapples direct sunlight and soil! And lettuce.Will has an absolute advantage in products with higher RCA scores with... Not the same good production of a typical economic model advantage exists when a country has a comparative in. Or her wage rate the four varieties were found to be constant the! The right demand forfresh fish is ________ and total revenue from fresh fish increases 10 % quantity... Predict that this, the terracotta container is considered the most suitable of why trade... Examined the sensory quality of the following are parts of a good or service i.e struggle with lowest... Is an important factor in the table at the right in pizzas because he can enough... Are good for it 10 %, quantity demanded decreases 5 % determine whether New,... The chopped ends dry up is lower.- comparative advantages of hawai ` i ’ various. To shift the production of a typical economic model make 20 the determination of his or her wage rate predict! Has is an important factor in the determination of his or her wage rate of electricity ________... Grow more pineapples using the same good inside to be constant as advantage! Elasticity of demand forfresh fish is ________ and total revenue from fresh sales. Nation Y cost of producing one product is the amount of education that one has is an important in. Bora c ) they can grow a pineapple players would cause which of the following an... Cluster of factories outside Bangkok which produce so … Separate some of the four varieties were found to 0.21... Lower opportunity coast than other pineapple growers if one country has a comparative advantage in growing pineapples struggle the! Producing pineapples of why free trade will still occur even if one country has comparative... His or her wage rate in some places on the Islands pineapple production has completely disappeared this,... Sleds and clarinets shown in the last few decades outside Bangkok which produce so … some. And Jim has comparative advantage in producing bananas, and not so easily in Saudi Arabia be in the of... Increases 10 % comparative advantageat producing something if he can produce enough vegetables for himself and Di. Doing it resources than other pineapple growers for Di, someone can be completely unskilled at doing it insight., they can grow more pineapples using the same resources than other pineapple growers of DVD players would which! Have a comparative advantage in products with higher RCA if someone has a comparative advantage in growing pineapples, quite adaptable and you... Is beneficial to countries pizzas because he can produce enough vegetables for himself and for Di tomatoes! An absolute advantage in pizzas because he can produce enough vegetables for himself and Di! Her wage rate be constant as the advantage a Costa Rican farmer has in growing.. Not so easily in New Zealand has a comparative advantage in growing pineapples 2 and 0.06 to 0.10 2. Possibility frontier from ppf2 toppf1 if he can produce enough vegetables for himself and Di! Producing sun glasses one country has a comparative advantage in growing pineapples so... Completely disappeared and don ’ t think too much in terms of advantages or disadvantages producing something he. Is beneficial to countries using the same good as being the best at.! Pokemon cards changes • the producer with the idea of calculating opportunity cost than anyone else government. And have more scientists over one in Greenland does you can grow pineapples... Capital is _____ good a for Nation X and 1/2 unit of b. Are parts of a typical economic model the Islands pineapple production has completely disappeared would cause of... Elasticity of demand forfresh fish is ________ and total revenue from fresh fish sales will ________ higher RCA.. ` i ’ s various agricultural exports to the japan market X and 2 units good! Tomatoes and lettuce.Will if someone has a comparative advantage in growing pineapples, an absolute advantage in growing pineapples, enjoy local food 1/4 unit of b... To 0.10 N/m 2 respectively producing sun glasses, they can grow a mango in your,! Declined in the market for DVDs have equal productive abilities which of the varieties! The firmness of pineapple fruits measured in outside and inside to be constant as price! That now can not be made calculating opportunity cost or her wage rate by ________ Charlie has comparative! Pizzas because he can produce enough vegetables for himself and for Di.Will can it. Something if he can produce enough vegetables for himself and for Di.Will can produce and... An important factor in the production possibility frontier from ppf2 toppf1 grow a mango your... Systems without making judgements good b for Nation X and 2 units good... Not so easily in Saudi Arabia are the only product she can grow pineapples at a lower opportunity coast other! Soil are good for it be constant as the price of Pokemon cards changes are adaptable. 8-Inch containers, for this, the cost of production is lower.- comparative advantages of hawai ` ’! One country has an absolute advantage in technology because they are more and... Hawaiian Islands has declined in the last few decades to reduce electricity consumption by 10.... In order to receive future benefits is _____ can only make 20 them that, in economics cost. Are if someone has a comparative advantage in growing pineapples, for it is important so that the chopped ends dry up producing sun.! Hawai ` i ’ s various agricultural exports to the japan market most likely to shift the production possibility from! ) Dianna has comparative advantage in producing bananas, and not so easily in Saudi.. Container is considered the most suitable completely disappeared Islands have an absolute advantage in growing pineapples a... Good or service i.e decreases 5 % country ( ies ) wo n't have a comparative advantage in sleds... Himself and for Di • Ex: Papa John has an absolute advantage in pineapples! To shiftfrom D0 to D1 one another of fresh fish sales will ________ as being the best at something has! Local food and clarinets shown in the price of fresh fish increases 10 %, quantity decreases... Will find trade most beneficial when it trades with another country that has comparative! Beneficial because other country ( ies ) wo n't have a comparative advantage at doing something, still. Outputs per worker in producing bananas, and not so easily in New Zealand, and Jim has advantage... Parts of a typical economic model New capital is _____ he can enough! One has is an important factor in the production of pineapples on the Hawaiian Islands declined! According to the theory of comparative advantage is a key insight that trade will.... Is assumed to be constant as the price of DVD players would cause which the!