Suppose that opportunity costs in India and Thailand are constant. In India, maximum feasible hourly production rates are either 0.3 unit of cloth or 0.2 unit of food. In Thailand, maximum feasible hourly production rates are either 0.5 unit of cloth or 0.5 unit of food. It is correct to state thatSelect one:A.India has no comparative advantage in producing cloth or wheat.B.India has a comparative advantage in producing both cloth and wheat.C.Thailand has a comparative advantage in producing cloth.D.India has a comparative advantage in producing cloth.

When two countries with different opportunity costs engage in trade based on comparative advantage, the result is:  A. Both countries experiencing increased production and consumption  B. Both countries producing only goods they have an absolute advantage in  C. Both countries experiencing decreased production  D. Both countries producing the same goods

The theory of comparative advantage demonstrates that even if a country is less efficient than another in producing all goods, it can still benefit from trade by specializing in the production of the good in which it has:  A. The highest absolute advantage  B. The lowest opportunity cost  C. The highest total production  D. The lowest absolute cost

2. The Ricardian theory of comparative advantage states that a country has a comparativeadvantage in rice ifA) unit labor requirement of rice is higher in that country compared to unit labor requirement ofrice in other countryB) unit labor requirement of rice is lower in that country compared to unit labor requirement ofrice in other countryC) wage rates in that country are highD) both b and cE) None of the above

The theory of comparative advantage suggests that countries should specialize in producing goods or services in which they have:Question 45Answera.Lower opportunity costsb.Higher opportunity costsc.Equal opportunity costsd.No opportunity costs

Which of the following conditions signify Comparative Advantage?a.When a country can produce goods at low cost.b.When a country can produce goods at low taxes.c.When a country can produce goods at low opportunity cost.d.When a country can transport goods at low cost.