Refer to Table 2-11. Does either China or South Korea have an ...

[penza]

Refer to Table 2-11. Does either China or South Korea have an absolute advantage and if so, in what product?
 
  A) South Korea has an absolute advantage in both products.
  B) South Korea only has an absolute advantage in wheat.
  C) China only has an absolute advantage in digital cameras.
  D) China only has an absolute advantage in wheat.

Question 2

Explain the relationship between price elasticity of demand and total revenue.
 
  What will be an ideal response?

[katheyjon]

Answer to Question 1

A

Answer to Question 2

If demand is elastic, an increase in price reduces total revenue, and a decrease in price increases total revenue.
If demand is inelastic, an increase in price increases total revenue, and a decrease in price decreases total revenue.
If demand is unit elastic, a change in price (either up or down) does not affect total revenue.