If Two Countries Each Are Currently Producing Two Goods, and Each

question 204

Multiple Choice

If two countries each are currently producing two goods, and each begins to specialize in the good in which it has a comparative advantage, what will happen to total (world) output?

• A)It will increase.
• B)It will decrease.
• C)It will be unchanged in both countries.
• D)It will rise in one country and fall in the other, but the total is unchanged.
• E)Uncertain; economic theory has no answer to this question.

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Definitions:

Evolutionary Perspective

A theoretical approach that examines how evolutionary principles, such as natural selection, shape behaviors and mental processes.

Correlation Coefficient

A statistical measure that indicates the extent to which two or more variables fluctuate together, ranging from -1 to 1.

Humanistic Perspective

A psychological perspective that emphasizes individual potential for growth and the role of unique human experiences in shaping personality, focusing on free will and self-actualization.

Experimental

Pertaining to a method of research in which variables are manipulated to observe outcomes in a controlled setting.