Which of the Following Appropriately Applies the Law of Comparative

question 123

Multiple Choice

Which of the following appropriately applies the law of comparative advantage?

• A) Countries with small amounts of labor relative to capital should specialize in producing labor-intensive commodities.
• B) Since Mexican labor is cheaper than American labor, trade between the countries results in exploitation of American workers.
• C) Since workers in countries such as the United States utilize larger amounts of capital than workers in less developed nations, trade between capital-rich and capital-poor nations results in the exploitation of labor in the less developed countries.
• D) Countries that are low cost producers of agricultural products should trade those products for goods they can produce only at a high opportunity cost.

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Definitions:

Non Est Factum

A defense in contract law that allows a person to avoid liability because they were mistaken about the nature of the document signed, not merely its contents.

Unconscionable Transaction

An equitable principle allowing courts to set aside a contract in which a party in a superior bargaining position took advantage of the other party and the consideration was grossly unfair.

Undue Influence

The use of excessive pressure by a dominant party to influence the decisions or actions of another, often undermining their free will.

Equitable Jurisdiction

The authority of a court to decide on cases based on fairness and ethical judgment rather than strictly on laws.