Suppose That the United States Has an Absolute Advantage Over

question 93

Multiple Choice

Suppose that the United States has an absolute advantage over Mexico in producing both agricultural and manufactured goods.In the U.S. ,the opportunity cost of 1 unit of agricultural output is 2 units of manufactured goods.In Mexico,the opportunity cost of 1 unit of agricultural output is 1.5 units of manufactured goods.Total production in the U.S.and Mexico will be maximized if

• A) the U.S.specializes in both types of output
• B) Mexico specializes in both types of output
• C) the U.S.specializes in agricultural goods and Mexico specializes in manufactured goods
• D) the U.S.specializes in manufactured goods and Mexico specializes in agricultural goods
• E) each country achieves self-sufficiency

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Definitions:

Balancing Act

The effort to maintain stability between different forces, demands, or aspects in a situation.

Sustainable Venture

A business endeavor designed to operate while keeping environmental, social, and financial viability in mind, ensuring long-term resilience and success.

Economic

Pertaining to the production, distribution, and consumption of goods and services, and the management of wealth.

Environmental

Pertaining to the natural world and the impact of human activity on its condition.