Refer to the Graph Shown

question 53

Multiple Choice

Refer to the graph shown. If Countries X and Y face the production possibility curves A and B, respectively, Country Y has a comparative advantage in the production of:

• A) neither agricultural goods nor industrial goods.
• B) both agricultural goods and industrial goods.
• C) agricultural goods only.
• D) industrial goods only.

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Definitions:

Purely Competitive

A market structure characterized by an infinite number of small buyers and sellers where the product is a commodity, allowing no single participant to significantly influence price.

Resource Market

The marketplace where resources or inputs (such as labor, raw materials, and capital) are bought and sold for the purpose of producing goods and services.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, typically labor.

Marginal Resource Cost

The added expenditure for making one more unit of a product or service.