A Person Has a Comparative Advantage in Producing a Particular

question 405

Multiple Choice

A person has a comparative advantage in producing a particular good if that person

• A) has higher productivity in producing it than anyone else has.
• B) can produce it at lower opportunity cost than anyone else can.
• C) has less desire to consume that good than anyone else has.
• D) has more human capital related to that good than anyone else has.

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Definitions:

Commercial Letter

A document used in international trade, containing information about a transaction or agreement between businesses.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are professionally managed.

Exchange-Traded Funds

Investment funds that are tradeable on stock exchanges, similar to stocks, and hold assets such as stocks, commodities, or bonds.

Contagion

A pattern in which stock markets have become increasingly interconnected around the world and markets in different countries have begun reacting similarly.