Suppose That the United States Can Make 15 Cars or 20

question 10

Multiple Choice

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor.France can make 10 cars or 18 bottles of wine with one year's worth of labor.From these numbers, we can conclude that

• A)the United States has a comparative advantage in the production of cars.
• B)France has a comparative advantage in the production of wine.
• C)the United States has an absolute advantage in the production of cars.
• D)All of the above are correct.

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Definitions:

Majority Rule

A decision-making process that follows the preference of more than half of the members in a group.

Public Choice Analysis

An economic theory that studies how public decisions are made, considering individuals as rational actors who pursue their self-interest.

Self-Interests

The pursuit of personal advantage and well-being, often driving economic decisions and behaviors.