Which of the following statements is true about comparative advantage?
a. Comparative advantage exists whenever one person, firm, or nation can do something at higher opportunity costs than some other individual, firm, or nation.
b. Comparative advantage is interesting theoretically, but it is not relevant when evaluating real-world economic conditions.
c. Low income countries cannot possibly have a comparative advantage in the production of any good or service because of the relatively low literacy rate.
d. Comparative advantage exists whenever one person, firm, or nation can do something at lower opportunity costs than some other individual, firm, or nation.
e. Only technologically advanced economies can have a comparative advantage in the production of a good or service.
d
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Suppose Americans become concerned about saving for retirement and, as a result, reduce their current consumption expenditures. Which of the following would you expect to occur as a result of this change?
a. In the short run, unemployment will increase and inflation will fall. b. In the short run, unemployment will increase and inflation will rise. c. In the short run, unemployment will decrease and inflation will rise. d. In the short run, unemployment will decrease and inflation will fall.
The rate at which a country can trade domestic products for imported products is its:
A) rate of production transformation. B) rate of market substitution. C) terms of trade. D) production possibilities curve.
Why does the short-run aggregate supply curve slope upward?
What will be an ideal response?
In Polynomia, real GDP increased by 8% and the population increased by 3% in 2018.. In 2018, Polynomia experienced
A. an economic decline. B. economic growth and an increase in living standards. C. no economic growth, but an increase in living standards. D. economic growth, but not an increase in living standards.