If Nation a Has an Absolute Advantage Over Nation B

question 103

Multiple Choice

If nation A has an absolute advantage over nation B in the production of a product, this implies that:

• A) it requires fewer resources in A to produce the good than in B.
• B) the cost of producing the good in terms of some other good's production that must be sacrificed is lower in A than in B.
• C) nation B could not benefit by engaging in trade with A.
• D) nation A could not benefit by engaging in trade with B.

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