The United States Has an Absolute Disadvantage to Spain on Wine

question 144

Multiple Choice

The United States has an absolute disadvantage to Spain on wine production.According to David Ricardo, specialization can be more efficient only in the following circumstances:

• A) Spain intentionally slows its production.
• B) The United States grows its own grapes, thereby reducing transport costs.
• C) In this case, specialization will not have an impact on either country.
• D) Specialization can lead to more efficient allocation of resources with free trade.

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Definitions:

Constitution

The fundamental principles or established precedents according to which a state or other organization is governed, often written in a single document.

Privileges and Immunities

Rights and protections granted by law to citizens, often used in the context of those guaranteed under the Constitution to promote equality among states.

Commerce Clause

The provision in Article I, Section 8, of the U.S. Constitution that gives Congress the power to regulate interstate commerce.

Noncommercial Activities

Activities not aimed at generating profit or conducted for commercial purposes.