Many Developing Countries Have a Potential Comparative Advantage in Manufacturing

question 5

Multiple Choice

Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initially compete with well-established industries in developed countries. This demonstrates the

• A) economic development argument.
• B) comparative advantage theory.
• C) national security argument.
• D) infant industry argument.
• E) mixed economy theory.

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Definitions:

Demand Function

A mathematical expression that shows the relationship between the quantity demanded of a good and its determining factors, such as price and income.

Marginal Cost

The climb in cumulative cost associated with the crafting of one more unit of a product or service.

Pumpkins

A type of winter squash, commonly orange in color when ripe and used for food, as well as for decorative purposes such as Halloween jack-o'-lanterns.

Constant Marginal Cost

The scenario where the cost to produce one additional unit of a product or service remains the same regardless of the quantity produced.