Ithilium, a European Country, Is Able to Produce More Electronics

question 43

Multiple Choice

Ithilium, a European country, is able to produce more electronics than Kilim, a North American country, even though both countries use the same amount of resources. Given this information, it can be deduced that Ithilium has a(n) :

• A) comparative advantage over Kilim.
• B) higher trade surplus than Kilim.
• C) absolute advantage over Kilim.
• D) higher balance of payments surplus than Kilim.

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Definitions:

In-Kind Benefit

Goods, services, or assistance provided to individuals instead of cash, often used in government welfare programs or charitable aid.

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A joint federal and state program in the United States that helps cover medical costs for individuals and families with limited income and resources.

Social Security

A government program that provides financial assistance to people with an inadequate or no income, particularly the elderly, disabled, and unemployed.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, beginning with the stock market crash of 1929, leading to massive unemployment and poverty.