If a Nation Has a Comparative Advantage in the Production

question 32

Multiple Choice

If a nation has a comparative advantage in the production of a good it,

• A) can produce that good at a lower opportunity cost than its trading partner.
• B) can benefit by restricting imports of that good.
• C) can produce that good using fewer resources than its trading partner.
• D) must be the only country with the ability to produce that good.

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Definitions:

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis, made by an employer to an employee, especially a professional or white-collar worker.

Warranty Liability

An obligation recognized by a company to repair, replace, or compensate for defective goods sold to customers.

Warranty Contracts

Legal agreements providing a promise to repair or replace a product if it fails within a specified period.

Contingent Liability

A potential obligation that may arise in the future depending on the occurrence of a certain event.