Refer to the production possibilities schedules

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For the next three questions, refer to the production possibilities schedules shown below: Country Rubber bands Paper Clips A 40 80 B 10 40 37. In country A the opportunity cost (relative price) of one paper clip is: a. 2 rubber bands. b. 1 rubber band. c. 1/2 rubber band. d. 1/4 rubber band. 38. The schedule indicates that: a. country B can produce more rubber bands than country A. b. country A has a comparative advantage in producing rubber band. c. country B can produce more paper clips than country A. d. country A has a comparative advantage in producing rubber band and paper clips. 39. To achieve gains from specialization: a. country A should export rubber bands to country B and import country B's paper clips. b. country A should export paper clips to country B and import country B's rubber band. c. country A should produce both rubber band and paper clips and not trade with country B. d. country B should produce both rubber band and paper clips and not trade with country A.

Reference no: EM131099364

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