A Nation's Comparative Advantage in the Production of an Item

question 94

Multiple Choice

A nation's comparative advantage in the production of an item is determined by:

• A) which country has already specialized in the production of the item.
• B) the total and marginal costs of producing the item.
• C) the opportunity cost of producing the item relative to a trading partner's opportunity cost.
• D) wage rates and other input costs.

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Definitions:

Premiums

Regular payments made to keep an insurance policy active and maintain coverage against risks.

Endowment Policy

A life insurance contract designed to pay a lump sum after a specific term or on death.

Life Policy

An agreement that awards a specified sum to a named beneficiary when the person covered by the policy dies.

Maximum Available

The highest amount or quantity that can be used, offered, or allocated from a particular resource or within a specific framework.