The Theory of Comparative Advantage Suggests That Nations Should Produce

question 79

Multiple Choice

The theory of comparative advantage suggests that nations should produce a good if they

• A) have the lowest opportunity cost.
• B) have the lowest wages.
• C) have the most resources.
• D) can produce more of the good than any other nation.

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Definitions:

Merchants

Individuals or entities engaged in the business of buying and selling goods for profit, often with expertise in the trade of specific types of goods.

Higher Standard

A level of quality or attainment that is above the ordinary or expected.

Nonmerchants

Individuals or entities that do not engage in buying, selling, or dealing in goods as their regular business activity.

Unconscionable Contract

An agreement that is so unfairly one-sided that it is deemed unenforceable under the law.