Is It Possible for a Country to Have an Absolute

question 78

Multiple Choice

Is it possible for a country to have an absolute disadvantage and a comparative advantage in the production of a good?

• A)No,these are incompatible on theoretical grounds.
• B)No,theory prevents it,but some economists claim it could occur.
• C)Yes,this situation can occur.
• D)Yes,in theory,although not in reality.

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Definitions:

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be either positive or negative.

Social Costs

The total cost of an action or decision, including both private costs and any externalities borne by society at large.

Positive Externality

Positive Externality occurs when a transaction or activity benefits a third party not directly involved, like the societal benefit of education or vaccinations.

External Benefit

A benefit that an individual or firm confers on others without receiving compensation.