Prior to International Trade, If Country a Has a Lower

question 79

Multiple Choice

Prior to international trade, if country A has a lower price of good X than does country B, then we know definitely that

• A) country B has an absolute advantage in the production of good X.
• B) country B has a comparative advantage in the production of good X.
• C) country A has an absolute advantage in the production of good X.
• D) country A has a comparative advantage in the production of good X.

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Definitions:

OTC

Over-The-Counter; referring to medicines that can be bought without a prescription.

Gastrointestinal

Relating to the stomach and intestines, encompassing the entire digestive tract.

Chemical Unit

A basic measurement of a substance used in chemistry that defines what amount of it is present.

Matter

The substance or substances of which any physical object consists or is composed, existing in solid, liquid, or gas states.