If a Nation Has a Comparative Disadvantage in the Production

question 45

Multiple Choice

If a nation has a comparative disadvantage in the production of some commodity:

• A) it cannot gain from international trade unless it has an absolute advantage in every other commodity.
• B) it cannot gain from international trade in the commodity.
• C) it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.
• D) it can gain from international trade in that commodity only if it has an absolute advantage in that commodity.

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Definitions:

Poverty

A socio-economic condition characterized by the lack of basic resources and opportunities necessary for a standard living.

Environmental Degradation

The deterioration of the environment through depletion of resources, destruction of ecosystems, and extinction of wildlife.

Agricultural Runoff

Water from rain or irrigation that carries fertilizers, pesticides, and other substances from agricultural fields into nearby water bodies, potentially causing pollution.

Oxygen Depletion

A condition where oxygen levels in an environment, especially aquatic systems, significantly decrease due to factors like overpopulation of organisms or excess nutrients.