The Theory of Comparative Advantage Shows That the Gains from International

question 18

Multiple Choice

The theory of comparative advantage shows that the gains from international trade do not just result from the absolute advantage of producing at lower cost, but also from pursuing comparative advantage and producing at a lower _______.

• A) opportunity cost
• B) absolute cost
• C) relative cost
• D) comparative cost

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Definitions:

Muscularis

A layer of muscle in the walls of hollow organs, such as the gastrointestinal tract, responsible for movement of the organ's contents.

Rugae

Folds or ridges found on internal organ surfaces to increase surface area for secretion and absorption.

Gastric Glands

Glands located in the lining of the stomach that produce gastric juice, including hydrochloric acid and digestive enzymes.

Gastric Pits

Small depressions in the lining of the stomach where gastric glands open, leading to the production of gastric juice.