Ask Question
BusinessBusiness
30 January, 06:56

For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries?

A. Switzerland has the comparative advantage in chocolate.

B. Switzerland has the comparative advantage in watches.

C. Germany has the comparative advantage in watches and chocolate.

D. Germany has the comparative advantage in watches.

+1
Answers (1)
  1. 30 January, 08:03
    0
    B. Switzerland has the comparative advantage in watches.

    Explanation:

    Comparative Advantage is when an economy can produce a commodity with comparatively less opportunity cost in terms of other good sacrifised, than other economy.

    It can also be denoted as an economy's more relative productivity in consumption, compared to other economy.

    Watch Chocolate

    Switzerland 1 50

    Germany 1 100

    Switzerland can produce a watch by sacrifising lesser units of chocolate i. e 50, than Germany - which sacrifises 100 watches chocolates for a watch production.

    Switzerland is 0.02 (1/50) times productive in watch than chocolate. Germany is lesser i. e 0.01 (1/100) time productive in watch than chocolate. Also, Germany is more productive in chocolate than watch 100X > 50X.

    So, Switzerland has comparative advantage in Watches & Germany in Chocolate.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected, production
Answers (1)
If company managers want to pursue cost-saving actions that can potentially result in their company achieving a sustainable cost advantage over rivals because the company's actions to cut costs cannot be detected by rivals from the information in
Answers (1)
Suppose that real GDP equals $10 trillion, nominal GDP equals $20 trillion, and the aggregate price level equals 2. If the velocity of money is 2, the money supply is: a) $20 trillion. b) $10 trillion. c) $5 trillion. d) $40 trillion.
Answers (1)
An adjusting entry was made on year-end December 31 to accrue salary expense of $2,200. Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,000 payment of salaries in January of
Answers (1)
In a relationalâ database, the three basic operations used to develop useful sets of dataâ are: a. âwho, what, and where. b. âselect, from, and join. c. âselect, join, and where. d. âselect, project, and join. e. âselect, project, and where.
Answers (1)
New Questions in Business
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.
Answers (1)
A registered representative opens a new account for a customer by telephone and receives an order to sell 300 shares of ABC at the market.
Answers (1)
Brian brewster sold property to a buyer who paid him $400,000 cash and assumed an existing mortgage of $150,000
Answers (1)
The following inventory information was taken from the records of Kleinfeld Inc.: Historical cost $12,000 Replacement cost $7,000 Expected selling Price $9,000 Expected selling cost $500 Normal profit margin 50% of price Assume that subsequent to
Answers (1)
Eliza has a policy that allows her to deduct the premiums she pays that exceed 10% of her adjusted gross income. Once she turns 65, she can deduct the premiums that exceed 7.5% of her adjusted gross income. Which type of policy does Eliza have?
Answers (1)
Home » Business » For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces.
Sign Up Forgot Password?