One Region Is Said to Have an Absolute Advantage Over

question 5

Multiple Choice

One region is said to have an absolute advantage over another region in the production of good X when

• A)the first region has a more productive labour force than the second.
• B)the first region has a larger supply of the raw materials required to produce good X.
• C)an equal quantity of resources can produce more of good X in the first region than in the second region.
• D)there is no demand for good X in the second region.
• E)the opportunity cost of one unit of X is lower in the first region than in the second region.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance based on accounting principles.

Drawee

In financial terms, this is the entity upon which a cheque or draft is drawn and is responsible for paying the amount.

Financial Statement

A summarized record that shows the financial health of a business or individual, including components like balance sheets, income statements, and cash flow statements.

Normal Balance

The side (debit or credit) of an account that is typically increased, indicating whether an account increases on the left side (debit) or right side (credit).