Absolute Advantage Exists Only When One Country Can Produce a Good

question 122

True/False

Absolute advantage exists only when one country can produce a good at a lower opportunity cost than can another country.

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Definitions:

Income Elasticity of Demand

Income elasticity of demand measures how the quantity demanded of a good or service changes in response to a change in consumers' income.

Quantity Demanded

In economics, the total amount of a good or service that consumers are willing and able to purchase at a given price.

Income

The financial gain received by an individual or household, usually derived from work, investments, or other sources, over a period.

Own Price Elasticity

The responsiveness of the quantity demanded of a good to a change in its own price, holding other factors constant.