In the Real World We Don't Observe Countries Completely Specializing

question 86

Multiple Choice

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.All of the following are reasons for this except

• A)not all goods and services are traded internationally.
• B)some countries have more resources than other countries.
• C)tastes for many traded goods are different in many countries because of globalization.
• D)production of most goods involves increasing opportunity costs.

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Definitions:

Anchoring

The tendency people have to unconsciously base, or “anchor,” the valuation of an item they are currently thinking about on recently considered but logically irrelevant information.

Decision Making

The process of selecting the best course of action from several alternatives to achieve a desired goal.

Irrelevant Information

Data or facts that do not influence decision-making processes in a given context, lacking value for the question or decision at hand.

Prospect Theory

A psychological theory that describes how people choose between probabilistic alternatives that involve risk.