A Country Possesses a Comparative Advantage in the Production of a Good

question 90

Multiple Choice

A country possesses a comparative advantage in the production of a good if

• A)it possesses an absolute advantage in the production of this good.
• B)it is able to produce more of this good per hour than any other country.
• C)the opportunity cost in terms of forgone output of alternative goods is lower for this country than it is for its trading partners.
• D)All of the above.

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Definitions:

Inelastic

Describes a situation where the demand or supply for a product does not significantly change with the alteration in price.

Elastic

Describes the sensitivity of demand or supply for a good or service to changes in its price, with higher elasticity indicating greater sensitivity.

Tax Burden

The total amount of taxes imposed on an individual, company, or economic sector by the government, often expressed as a percentage of income or GDP.

Slightly Elastic

Refers to a situation where a small change in price leads to a relatively small change in the quantity demanded or supplied.