Employing All Its Available Resources, Nation Alpha Can Produce Either

question 339

Multiple Choice

Employing all its available resources, Nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of
Clothing.

• A) Nation Alpha has a comparative advantage in producing clothing.
• B) Nation Beta has a comparative advantage in producing chemicals.
• C) Nation Alpha has a comparative advantage in producing chemicals.
• D) Nation Beta is the high-cost producer of clothing.

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Definitions:

Barter Economy

An economic system where goods and services are exchanged directly for other goods and services without the use of money as a medium of exchange.

Five Fundamental Questions

Key economic questions addressing what to produce, how to produce, for whom to produce, who owns and controls resources, and how to provide for growth and innovation.

Business Risk

The potential for losses or less-than-expected returns stemming from the operations or environment of a particular company or industry.

Firm's Owners

Individuals or entities that hold ownership rights in a company, gaining profits and bearing losses from its operation.