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Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.
Which of the following statements are valid as per given scenario?
I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.
II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.
III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.
I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.
II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.
III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.
- a)I & II only
- b)I only
- c)I & III only
- d)All I, II & III are valid
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Two goods are produced, say wine and wheat, using only one input, i.e....
- The principle of comparative advantage is fundamental to determination of the pattern of trade among nations. David Ricardo was the economist who coined this term. Opportunity cost, stated briefly, is the benefit foregone for undertaking an activity. So, if a country has a lesser value for its resources in the alternative use, it can most efficiently employ resources in this activity. This is what comparative advantage means.
- Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each. In such a scenario, while Nation B will have to forego 1 unit of wine for production of an additional unit of wheat, Nation A will have to forego only half a unit of wine for the same.
- Since Nation A can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat. On the other hand, Nation B has to forego only one unit of wheat for production of additional units of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.
Most Upvoted Answer
Two goods are produced, say wine and wheat, using only one input, i.e....
Understanding the Production Possibilities
In this scenario, we analyze the opportunity costs of producing wine and wheat in two nations.
Opportunity Cost Calculation
- Nation A:
- Producing 1 unit of wine requires 10 units of labor.
- Producing 1 unit of wheat requires 5 units of labor.
- Opportunity cost of producing 1 unit of wine = 10/5 = 2 units of wheat.
- Therefore, for each additional unit of wine produced, Nation A must forego 2 units of wheat.
- Nation B:
- Producing 1 unit of wine requires 10 units of labor.
- Producing 1 unit of wheat requires 10 units of labor.
- Opportunity cost of producing 1 unit of wine = 10/10 = 1 unit of wheat.
- For Nation B, the opportunity cost is 1 unit of wheat for each additional unit of wine.
Analysis of Statements
- Statement I:
- Valid. Nation B must give up 1 unit of wine for an additional unit of wheat (10 labor for 10 wheat). Nation A gives up 0.5 units of wine for 1 wheat (5 labor for wheat).
- Statement II:
- Invalid. Nation B does not have a lower opportunity cost in wheat production since it sacrifices 1 unit of wine for each unit of wheat, which is equal to Nation A's opportunity cost.
- Statement III:
- Invalid. Nation A must forego 2 units of wheat for 1 unit of wine, not 1 unit as stated. Therefore, the comparison is incorrect.
Conclusion
The correct answer is option B (I only) because only Statement I accurately reflects the opportunity costs associated with the production of wine and wheat in the two nations.
In this scenario, we analyze the opportunity costs of producing wine and wheat in two nations.
Opportunity Cost Calculation
- Nation A:
- Producing 1 unit of wine requires 10 units of labor.
- Producing 1 unit of wheat requires 5 units of labor.
- Opportunity cost of producing 1 unit of wine = 10/5 = 2 units of wheat.
- Therefore, for each additional unit of wine produced, Nation A must forego 2 units of wheat.
- Nation B:
- Producing 1 unit of wine requires 10 units of labor.
- Producing 1 unit of wheat requires 10 units of labor.
- Opportunity cost of producing 1 unit of wine = 10/10 = 1 unit of wheat.
- For Nation B, the opportunity cost is 1 unit of wheat for each additional unit of wine.
Analysis of Statements
- Statement I:
- Valid. Nation B must give up 1 unit of wine for an additional unit of wheat (10 labor for 10 wheat). Nation A gives up 0.5 units of wine for 1 wheat (5 labor for wheat).
- Statement II:
- Invalid. Nation B does not have a lower opportunity cost in wheat production since it sacrifices 1 unit of wine for each unit of wheat, which is equal to Nation A's opportunity cost.
- Statement III:
- Invalid. Nation A must forego 2 units of wheat for 1 unit of wine, not 1 unit as stated. Therefore, the comparison is incorrect.
Conclusion
The correct answer is option B (I only) because only Statement I accurately reflects the opportunity costs associated with the production of wine and wheat in the two nations.
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Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer?
Question Description
Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? for Bank Exams 2025 is part of Bank Exams preparation. The Question and answers have been prepared according to the Bank Exams exam syllabus. Information about Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Bank Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer?.
Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? for Bank Exams 2025 is part of Bank Exams preparation. The Question and answers have been prepared according to the Bank Exams exam syllabus. Information about Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Bank Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Bank Exams.
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Here you can find the meaning of Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Two goods are produced, say wine and wheat, using only one input, i.e. labour. Suppose Nation A requires 10 and 5 units of labour to produce one unit of wine and wheat, respectively, whereas Nation B requires 10 units of labour each.Which of the following statements are valid as per given scenario?I. In such a scenario, Nation B will have to forego 1 unit of wine for production of an additional unit of wheat whereas Nation A will have to forego only half a unit of wine for the same.II. Since Nation B can produce wheat at a lower opportunity cost, therefore its best for it to produce and export it, i.e. specialize in the production of wheat.III. Nation A has to forego only one unit of wheat for production of additional unit of wine as opposed to a loss of two units of wheat in case of Nation A. Therefore, Nation B must specialize in the production of wine.a)I & II onlyb)I onlyc)I & III onlyd)All I, II & III are validCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Bank Exams tests.
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