Suppose That Greece and Portugal Are Both Engaged in the Production

question 21

Multiple Choice

Suppose that Greece and Portugal are both engaged in the production of grapes and figs, and that Greece has an absolute advantage in the production of both goods. If Portugal has a lower opportunity cost for producing figs, then

• A) Portugal has a comparative advantage in the production of figs, but it is outweighed by Portugal's absolute advantage in fig production.
• B) Greece has a comparative advantage in the production of both goods.
• C) Portugal has a comparative advantage in fig production, but there will be no gains from specialization and trade.
• D) Portugal has a comparative advantage in the production of figs, and specialization and trade between the two countries can be mutually beneficial.

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Definitions:

Behavior Modification

A therapeutic approach designed to change specific undesirable behaviors using reinforcement principles.

Classical Conditioning

The method of instruction where a response is learned by associating a stimulus from the environment with one that occurs naturally.

Unconditioned Stimulus (US)

A stimulus that naturally triggers a response without any prior learning or conditioning.

Conditioned Stimulus (CS)

An initially neutral stimulus that, after being linked with an unconditioned stimulus, comes to elicit a conditioned response over time.