Suppose the World Economy Is Composed of Just Two Countries

question 68

Multiple Choice

Suppose the world economy is composed of just two countries: Italy and Greece. Each can produce steel or chemicals, but at different levels of economic efficiency. The production possibilities curves for the two countries are shown in the graphs. It can be deduced that

• A)Greece has a comparative advantage in chemicals.
• B)Greece has the absolute advantage in both products.
• C)Italy has a comparative advantage in chemicals.
• D)it is more costly in terms of resources to produce steel in Italy.

---

Definitions:

Behaviors

The range of actions and mannerisms exhibited by individuals, organisms, or systems in conjunction with their environment.

Major Types

Depicts categories or principal varieties within a broader classification.

Emotions

Complex psychophysiological experiences that result from the interpretation of personal significance of a particular event or situation.

Researchers

Individuals engaged in systematic investigation and study to establish facts and reach new conclusions, often within academic, scientific, or industrial fields.