Canada and the U

question 134

Multiple Choice

Canada and the U.S.both produce wheat and computer software.Canada is said to have the comparative advantage in producing wheat if

• A)Canada requires fewer resources than the U.S.to produce a bushel of wheat.
• B)the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.
• C)the opportunity cost of producing a bushel of wheat is lower for the U.S.than it is for Canada.
• D)the U.S.has an absolute advantage over Canada in producing computer software.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or output of a firm.

Total Revenue

The total income a firm receives from selling its goods or services, calculated as the quantity sold multiplied by the price per unit.

Total Cost

The total expenses a company incurs to produce a specific quantity of goods, encompassing both constant and fluctuating costs.

Marginal Output

The additional output that results from the use of one more unit of a production input, assuming other inputs are constant.