Which of the Following Statements Is True About Comparative Advantage

question 6

Multiple Choice

Which of the following statements is true about comparative advantage?

• A)Comparative advantage exists whenever one person,firm,or nation can do something with greater opportunity costs than some other individual,firm,or nation.
• B)Comparative advantage is interesting theoretically,but it is not relevant when evaluating real-world economic conditions.
• C)Third-world countries cannot possibly have a comparative advantage in the production of any good or service because of the relatively low educational attainment of their work force.
• D)Comparative advantage exists whenever one person,firm,or nation can do something with lesser opportunity costs than some other individual,firm,or nation.
• E)Only highly advanced economies can have a comparative advantage in the production of a good or service.

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Definitions:

Rock Formation

The process by which geological forces lead to the creation of rock structures, through mechanisms like cooling of magma, sedimentation, and metamorphism.

Lithosphere

Earth’s upper, rigid layer composed of the crust and uppermost mantle.

Continental Crust

The thick layer of granite, sedimentary, and metamorphic rocks that forms the continents and continental shelves, distinct from oceanic crust.

Oceanic Crust

A thin layer of Earth's crust that lies beneath the ocean basins, composed mainly of basalt.