Figure 22-8 -Figure 22-8 Has Four Sets of Production Possibility Curves for Production

question 48

Multiple Choice

Figure 22-8

-Figure 22-8 has four sets of production possibility curves for two hypothetical countries.In which case will there be no advantage to trade between the two countries?

• A)1
• B)2
• C)3

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Definitions:

Comparative Advantage

A person's, corporation's, or country's capability to manufacture a good or provide a service with a smaller opportunity cost than that of its competitors.

Absolute Advantage

The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Banana Production

The cultivation, harvesting, and processing of bananas, typically for consumption as food or for use in various products.

Comparative Advantage

The ability of an individual or firm to produce a good or service at a lower opportunity cost than other producers.