When Nations Specialize According to Their Comparative Advantage

question 43

Multiple Choice

When nations specialize according to their comparative advantage

• A) total world production rises but total world consumption declines.
• B) total world production and consumption increase.
• C) consumption rises in one country but falls in all others.
• D) None of these happen.

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Definitions:

Perfectly Rational

A theoretical state in decision-making where an individual makes decisions that lead to the optimal outcome, based entirely on logical reasoning.

Economic Persons

A theoretical concept suggesting that individuals act out of self-interest, making rational decisions to achieve the greatest personal benefit.

Perfectly Rational

A theoretical concept where individuals make decisions with complete logic, maximizing utility.

Nobel Prize

A set of international awards granted annually in several categories such as Peace, Literature, and various sciences, recognizing significant contributions to humanity.