An Economy Is Said to Have a Comparative Advantage in the Production

question 19

Multiple Choice

An economy is said to have a comparative advantage in the production of a good if it can produce that good:

• A)with more resources than another economy.
• B)with a higher opportunity cost than another economy.
• C)outside its production possibility frontier.
• D)at a lower opportunity cost than another economy.

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Definitions:

Complementary Goods

Products or services that are consumed together because the use of one enhances the use or value of the other.

Income Elasticity

A measure of how much the demand for a good or service changes in response to a change in consumers' income.

Cross Elasticity of Demand

A measure of how the quantity demanded of one good responds to a change in price of another good, indicating substitutes or complements.

Digital Cameras

Electronic devices that capture and store photographs in digital format, allowing for immediate viewing, digital storage, and manipulation.