Recall the Application About Productivity in the Nation of Latvia

question 24

Multiple Choice

Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s) .
-According to this Application, in the 1990s EU countries had ________ in the production of all products compared to Latvia.

• A) an absolute advantage and a comparative advantage
• B) an absolute advantage but not a comparative advantage
• C) a comparative advantage but not an absolute advantage
• D) neither an absolute advantage nor a comparative advantage

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive.

Equilibrium

A state of balance in a market or economy where supply equals demand, with no external influences causing disruption.

Market

Any structure that allows buyers and sellers to exchange any type of goods, services, and information.