Author Question: Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports ... (Read 390 times)

mwit1967 · **on:** Jun 29, 2018

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

A) New Zealand has an absolute disadvantage in producing surfboards relative to Australia.
B) Labor costs are higher for surfboard producers in New Zealand than in Australia.
C) Australia has a lower opportunity cost of producing surfboards relative to New Zealand.
D) Australia also has an absolute advantage in producing surfboards relative to New Zealand.

Question 2

Refer to Figure 5-13. The actual price of gasoline paid by consumers after the tax is implemented is ________ per gallon.

A) 3.00 B) 3.75 C) 4.25 D) 5.00