According to the Theory of Comparative Advantage, a Country Should

question 124

Multiple Choice

According to the theory of comparative advantage, a country should

• A) specialize in and export goods with the highest opportunity cost.
• B) specialize in and export goods with the lowest production cost.
• C) specialize in and export goods with the lowest opportunity cost.
• D) specialize in and export goods with the lowest average cost.

---

Definitions:

Price Reduction

A decrease in the amount charged for a good or service, often used as a sales strategy to increase demand or respond to excess supply.

Demand Elastic

The responsiveness of the quantity demanded of a good or service to a change in its price; higher elasticity means consumers are more sensitive to price changes.

Price Elastic

A term describing how responsive the demand for a good is to a change in its price.

Total Revenue

The total amount of money generated by a business from the sale of its goods or services before any costs or expenses are deducted.