Question 6(multiple choice worth 5 points)

(05.04 mc)

worker hours to produce one unit of natural gas worker hours to produce one unit of oil
brazil
4
9
argentina
2
10
mexico
3
7
united states
1
6

according to the chart, which country has the comparative advantage in oil production?
brazil
mexico
argentina
united states

United States

Explanation:

In this case, the United States has the comparative advantage in oil production because it requires relatively fewer hours of work (only 6 hours, compared to 10 of Argentina, 9 of Brazil, and 7 of Mexico) in order to produce one unit of oil. As we can see in the chart, the United States has the absolute advantage in the production of both goods, but if these countries start to trade among them, they can specialize in the production of the goods that require relative fewer hours of work and buy the other product to the country who specializes in its production.

even though you have attached neither the chart nor the generalizations, i have located them online. the right answer is d, since they are asking you about a generalization. you can only infer from the chart that between 2008 and 2009 the number of employed workers decreased significantly (from over 115 millions to 107 millions approximately), which signals some type of economic crisis.  

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