Consider a World with Two Countries and Two Goods

question 227

Multiple Choice

Consider a world with two countries and two goods. Under which of the following conditions does comparative advantage NOT exist?

• A) One country can produce both goods more cheaply than the other country.
• B) One country has more productive resources or inputs than another country.
• C) The opportunity cost of producing each good is the same in each country.
• D) One country has an absolute advantage in producing one good while the other country has an absolute advantage in producing the other good.

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Definitions:

Chlorination

The addition of chlorine to water or organic compounds, either as a disinfectant or to introduce chlorine atoms into molecules during chemical synthesis.

Methane

A colorless, odorless gas, the simplest alkane and the main component of natural gas; used as a fuel and in organic synthesis.

Termination Reaction

The chemical reaction that concludes a chain reaction process by reacting two or more reactive intermediates to form a stable product.

Chlorination

A chemical process where chlorine is introduced to a compound, often to disinfect or to modify organic molecules in synthesis.