The Fact That International Specialization and Trade Based on Comparative

question 91

Multiple Choice

The fact that international specialization and trade based on comparative advantage can increase world output is reflected in the fact that:

• A)the production possibilities curve of any two nations are identical.
• B)a nation's production possibilities and trading possibilities lines coincide.
• C)a nation's trading possibilities line lies to the right of its production possibility
• D)a nation's production possibilities line lies to the right of its trading possibilities.

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Definitions:

Government

The system or group of people governing an organized community, often a state or nation.

External Benefit

A positive effect or advantage that results from a product or service's production or consumption, which affects third parties not directly involved in the transaction.

Tax

A financial charge imposed by a government on individuals or entities, primarily to raise revenue for public expenditures.

Activity

Engagements or actions undertaken by individuals, businesses, or economies, often implying economic transactions or movements.