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ddd [48]
3 years ago
10

See the production possibility tables for Marketopia and Econlandia below.

Business
1 answer:
Anestetic [448]3 years ago
5 0

Answer:

a. Marketopia has a comparative advantage in the production of pies.

Explanation:

The computation is shown below

As we know that the comparative advantage principle refers that the firm which has less opportunity cost in the production of a good should generate that specific good and specalize  according to this

Now

for Marketopia

The opportunity cost of cookies is 18 by 30 pies = 0.6 pies

The opportunity cost of pies are 30 by 18 cookies = 1.67 cookies

For Ecolandia

The opportunity cost of cookies is 9 by 90 = 0.1 pies

The opportunity cost of pies is 90 by 9 = 10 cookies

We can see that Econlandia has the comparative advantage in cookies while on the other hand the marketopia has the comparative advantage in pies

Therefore the correct option is a.

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So, this is considered as the mirror image of the bargaining power of buyers and so it tends to refer to the pressure that suppliers can put on companies by raising their prices, and lowering their quality, or reducing the availability of their products.

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