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:

Income

Money that an individual or business receives, typically in exchange for providing a good or service, or through investing.

Slope

In mathematics, the rate at which a line inclines or declines, indicating the steepness of the line.

Regression Line

A straight line that describes how a response variable Y changes as an explanatory variable X changes, used in linear regression.

Least Squares Regression Line

A straight line that minimizes the sum of the squared differences between the observed values and the values predicted by the line.