Ask Question
BusinessBusiness
14 February, 05:37

3. According to their comparative advantage, Alphaland specializes in axes and Betaville specializes in batons. Alphaland will trade axes for batons if: (A) The price of batons is higher than Alphaland's cost to produce axes. (B) The price of batons is lower than Betaland's cost to produce axes. (C) The price of batons is lower than Alphaland's cost to produce batons. (D) The price of batons is higher than Betaland's cost to produce axes.

+1
Answers (1)
  1. 14 February, 05:53
    0
    Answer: Option (C) is correct.

    Explanation:

    A country has a comparative advantage in producing a commodity if the opportunity cost of producing that good is lesser in that country as compared to the other country.

    From the information given in the question, it is clear that Alphaland has a comparative advantage in axes and Betaville has a comparative advantage in batons.

    Hence, Alphaland will trade axes for batons only if the price of batons is lower than the cost of producing it in Alphaland. So that there is a possibility mutually beneficial trade.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “3. According to their comparative advantage, Alphaland specializes in axes and Betaville specializes in batons. Alphaland will trade axes ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Where was the first Starbucks in New York City?
Answers (1)
Lighter Than Air Industries expects that it would lose $10 million if a tornado struck its aircraft operations facility. It expects that a tornado might strike the facility once every 100 years. What is the single loss expectancy for this scenario?
Answers (1)
During October, Pharoah Company experiences the following transactions in establishing a petty cash fund. Oct. 1 A petty cash fund is established with a check for $147.00 issued to the petty cash custodian.
Answers (1)
Why do price discrimination and the existence of slightly different variants of the same product tend to go hand in hand? By introducing slightly different variants of the product, firms that price discriminate are able to
Answers (1)
The crucial first step in the treatment of anorexia is to
Answers (1)
New Questions in Business
What can a benefit and a drawback be for a 'franchisor'?
Answers (1)
Roy was doing repair work in the apartment of Melinda. He saw a deep crack in the floor but did not repair it at the time. Later while doing ceiling work, his ladder got stuck in the crack and he injured himself.
Answers (1)
Imaging Services was organized on March 1, 2018. A summary of the revenue and expense transactions for March follows:Fees earned $1,100,000Wages expense 715,000Rent expense 80,000Supplies expense 9,000Miscellaneous expense 12,000Prepare an income
Answers (1)
Natasha has $1000 to open a checking account. She can maintain a monthly balance of $600. She also has a savings account at the same bank. Her employer offers direct deposit and she plans to use online bill paying.
Answers (1)
Ortega Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a computer hard drive is $42. Ortega would like a profit of $12 per drive.
Answers (1)
Home » Business » 3. According to their comparative advantage, Alphaland specializes in axes and Betaville specializes in batons. Alphaland will trade axes for batons if: (A) The price of batons is higher than Alphaland's cost to produce axes.
Sign Up Forgot Password?