If a Nation Has an Absolute Advantage in the Production

question 109

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 the good using fewer resources than its trading partner.
• C) it can benefit by restricting imports of that good.
• D) None of these.

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Definitions:

Investment Account

An account held at a financial institution which allows an individual to deposit funds and make investments in securities and other assets.

Debit/Credit

Fundamental aspects of all accounting transactions, where debits are entries on the left side, and credits are entries on the right side, used to record business transactions in the ledger.

Dividend

Money dispensed by a corporation to its owners/shareholders, generally from the company's earnings.

Investment Income

Income coming from interest payments, dividends, capital gains, and other profits made through an investment.