Author Question: If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year, while ... (Read 150 times)

geoffrey · **on:** Jun 30, 2018

If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, the country with the comparative advantage in producing potatoes is ____ and the country with the absolute advantage in producing potatoes is ____.
a. the United States; the United States
b. the United States; Ireland
c. Ireland; the United States
d. Ireland; Ireland

Question 2

If the production of a product creates external costs, there is an ____ to production of that good which the government can correct for by ____.
a. overallocation of resources; granting a subsidy
b. overallocation of resources; imposing a per-unit tax
c. underallocation of resources; granting a subsidy
d. underallocation of resources; imposing a per-unit tax