How would a strong U. S. dollar impact the trade of grain produced in the United States?

U. S. grain exports decrease

U. S. grain exports increase

U. S. grain imports decrease

U. S. grain imports stagnate

Two countries produce milk and dairy products efficiently. Neither has an absolute advantage. However, Country A exports milk to Country B, and Country A imports cotton from Country B. Which of the following is inferred?

The opportunity cost of producing milk is lower for Country A.

The opportunity cost of producing cotton is higher for Country B.

Country A has a natural resource advantage in cotton.

Country B has a natural resource advantage in milk.

Question

Business

Markus Montes

25 February, 01:41

How would a strong U. S. dollar impact the trade of grain produced in the United States?

U. S. grain exports decrease

U. S. grain exports increase

U. S. grain imports decrease

U. S. grain imports stagnate

Two countries produce milk and dairy products efficiently. Neither has an absolute advantage. However, Country A exports milk to Country B, and Country A imports cotton from Country B. Which of the following is inferred?

The opportunity cost of producing milk is lower for Country A.

The opportunity cost of producing cotton is higher for Country B.

Country A has a natural resource advantage in cotton.

Country B has a natural resource advantage in milk.

+2

Answers (1)

Know the Answer?

Deegan Davis · Answer 1

When a country has a strong currency, generally its export decreases - this is the answer to the first question.

Imagine, a tone of rice costs 100 dollars, that is 100 pounds. With a strong dollar, it's 120 pounds now - the British will be able to afford less of US rice now!

About the second question - I think that if neither has an absolute advantage, this also likely means that neither has more natural resources.

now, country A exports milk to country B, which means that it's cheaper to produce milk in the country A. Therefore, the answer " The opportunity cost of producing milk is lower for Country A" is correct.