If the United States Has Absolute Advantages in Producing Wheat

question 245

True/False

If the United States has absolute advantages in producing wheat and automobiles, it should never trade with other countries that produce wheat and automobiles.

---

Definitions:

Economic Profit

is the surplus or gain realized when the total revenues generated by a business exceed the explicit and implicit costs of operation.

Average Total Cost

The sum of all production expenses divided by the amount of products made.

Units

Basic measures or quantities, such as length, mass, time, etc., that serve as standards for expressing and comparing quantities.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced.