If Individuals a and B Can Both Produce Only Goods

question 93

Multiple Choice

If individuals A and B can both produce only goods X and Y, and A does not have a comparative advantage in the production of either X or Y, then we know

• A)B has an absolute advantage in the production of X and Y.
• B)A and B have the same opportunity costs for X and for Y.
• C)B has a comparative advantage in the production of both X and Y.
• D)the gains from trade will be large but only in one direction.
• E)A must have lower opportunity costs of production for both goods.

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Definitions:

Subject Matter

The specific content or topic that is being discussed, studied, or dealt with.

Clarification

The process of seeking or providing additional information and explanation to ensure mutual understanding and clear communication.

Fisher

A term that might refer to a person engaged in fishing, or in an academic context, could relate to Ronald Fisher, a key figure in the development of statistical methods.

Outstanding Narration

Exceptionally skilled storytelling or recounting of events in a compelling and engaging manner.