In the Theory of Comparative Advantage, a Good Should Be

question 37

Multiple Choice

In the theory of comparative advantage, a good should be produced in that nation where

• A) the production possibilities line lies further to the right than the trading possibilities line.
• B) its cost is least in terms of alternative goods that might otherwise be produced.
• C) its absolute cost in terms of real resources used is least.
• D) its absolute money cost of production is least.

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Definitions:

Ethanol

A renewable fuel made from corn and other plant materials. It is blended with gasoline to increase octane levels and reduce emissions.

Alternative Energy

Energy sources that are considered alternatives to the traditional fossil fuels, such as solar, wind, and hydroelectric power.

Nuclear Power

The use of nuclear reactions to generate electricity, typically through the process of nuclear fission.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, typically focusing on balancing environmental, economic, and social goals.