Use the Production Possibilities Data Below for Austria and Italy

question 87

Multiple Choice

Use the production possibilities data below for Austria and Italy to answer the following question(s) . Table 2-1
Refer to Table 2-1. According to the law of comparative advantage, both Austria and Italy could gain if

• A) Austria produced all of the food and clothing and Italy did not produce anything.
• B) Austria specialized in producing clothing, Italy specialized in producing food, and they traded.
• C) Austria specialized in producing food, Italy specialized in producing clothing, and they traded.
• D) Italy and Austria were both were self-sufficient and did not trade.

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Definitions:

Latent Learning

Learning that occurs without any obvious reinforcement of the behavior or associations that are learned until there is an incentive to demonstrate it.

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A process where a stimulus strengthens a behavior because it is associated with a primary reinforcer.

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An internal psychological representation of the spatial layout of the external world.