Individuals a and B Both Produce Good X

question 443

Multiple Choice

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

• A) can produce X using newer technology than can B.
• B) has a lower opportunity cost of producing good X than has B.
• C) has a lower opportunity cost of producing good X than of producing good Y.
• D) can produce more units of X in a given time period than can B.

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Definitions:

Raw Material

The basic material from which a product is made, often processed in manufacturing to create a final product.

Production

The process of creating goods and services.

March

A month of the year falling between February and April.

February

The Gregorian calendar's second month.