A Person Who Has an Absolute Advantage in the Production

question 122

Multiple Choice

A person who has an absolute advantage in the production of all goods will

• A)also have a comparative advantage in the production of all goods.
• B)not be able to gain from specialization and trade.
• C)produce all goods at the lowest opportunity cost.
• D)not have a comparative advantage in the production of any goods.
• E)have a comparative advantage in the production of only some goods and not others.

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Definitions:

Personal Liability

The legal obligation of an individual to repay his or her debts, often extending to personal assets if necessary.

Double Taxation

The imposition of two or more taxes on the same income, asset, or financial transaction, often occurring with income taxed both at corporate and personal levels.

Firm Life

The period during which a company operates, from its inception to the point it ceases operations or is dissolved.

Ease of Formation

The simplicity with which a business or company can be legally established, often considered in the context of different types of business entities like corporations, partnerships, and sole proprietorships.