If Country a Has a Comparative Advantage in the Production

question 12

Multiple Choice

If Country A has a comparative advantage in the production of good X relative to Country B,

• A)then Country A also has an absolute advantage in the production of this good.
• B)then Country A also has an absolute advantage in the production of some good other than X.
• C)then the opportunity cost of producing X in Country A is higher than in Country B.
• D)then the opportunity cost of producing X in Country A is lower than in Country B.
• E)We do not have enough information to say anything about relative opportunity costs.

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Definitions:

Cost Curves

Graphical representations used in economics to show the cost of producing a certain number of goods, highlighting how costs change with different levels of output.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Average Cost Curve

A graphical representation that illustrates the cost per unit of output at different levels of production.

Long-run

A period in economics where all factors of production can be varied, and there are no fixed inputs, allowing full adjustment to changes.