Japan and China can both produce guns and rice. The country with ...

[Shelles]

Japan and China can both produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will
 a. import guns.
 b. have a comparative advantage in guns.
  c. have an absolute advantage in guns.
 d. have a comparative advantage in rice.

Question 2

Under a system of transferable pollution rights, which of the following firms is most likely to purchase a 500 permit to emit a ton of pollutants in to the atmosphere?
 a. a non-polluting firm
 b. a polluting firm that can reduce emissions at a cost of 500 per ton
  c. a polluting firm that can reduce emissions at a cost of 200 per ton
  d. a polluting firm that can reduce emissions at a cost of 600 per ton

[vkodali]

Answer to Question 1

b

Answer to Question 2

d