A Country Has an Absolute Advantage Over Another in the Production

question 129

Multiple Choice

A country has an absolute advantage over another in the production of widgets if it can produce

• A)widgets using smaller quantities of resources than can the other country.
• B)more widgets than can the other country.
• C)widgets more efficiently than can the other country.
• D)widgets at a lower opportunity cost than can the other country.

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Definitions:

Flexible Wages

A wage system where pay rates can vary based on market conditions, performance, or negotiated agreements, as opposed to fixed salaries.

Quantity of Money

The total amount of money in circulation within an economy, including cash, coins, and balances held in checking and savings accounts.

Classical School

An economic theory that emphasizes free markets, the importance of supply and demand in determining prices, and the idea that economies are self-regulating systems.

Supply-Side

Economic policies aimed at increasing production and supply of goods and services, often through tax cuts or deregulation.