If a Nation Has an Absolute Advantage in the Production

question 208

Multiple Choice

If a nation has an absolute advantage in the production of a good,

• A)it can produce that good at a lower opportunity cost than its trading partner.
• B)it can produce that good using fewer resources than its trading partner.
• C)it will specialize in the production of that good and export it.
• D)all of these.

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Definitions:

Shortage

A situation where the demand for a product or service exceeds the available supply at a specific price point.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded, typically leading to lower prices.

Quantity Supplied

The amount of a commodity that producers are willing and able to sell at a particular price over a given period of time.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price point in a certain period.