Author Question: Suppose that country X can produce 1,000 pounds of flour per hour, or catch 500 pounds of fish per ... (Read 376 times)

jenna1 · **on:** Jun 30, 2018

Suppose that country X can produce 1,000 pounds of flour per hour, or catch 500 pounds of fish per hour. In contrast, country Y can produce 1,800 pounds of flour per hour, or catch 300 pounds of fish per hour. If both countries specialize in their comparative advantage and trade, by how much combined output of fish and flour per hour be greater than if there were no trade and the countries divide an hour of time equally between each output?
a. 200 pounds of flour and 200 pounds of fish.
b. 400 pounds of flour and 100 pounds of fish.
c. 50 pounds of flour and 50 pounds of fish.
d. 160 pounds of flour and 200 pounds of fish.

Question 2

Demand-pull inflation is most pronounced during a recession (as opposed to the recovery phase of the business cycle).
a. True
b. False
Indicate whether the statement is true or false